Franchise Agreements Propel Growth Stateside

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CHICAGO — New franchise agreements remain the cornerstone of growth at American restaurant chains, according to a new report from Technomic, a Chicago-based research and consulting firm.

In light of the recent recession, franchisees have benefited from franchisor incentives like better credit support, fee reductions and temporarily reduced royalty rates.

“A focus on growing the franchise system allows franchisors to spend less on restaurant-level operations and redirect capital toward system-wide marketing and brand initiatives,” explains Darren Tristano, executive vice-president at Technomic.

Last year, the Top 400 restaurant franchisors made approximately $31.8 billion, up 1.6 per cent (nominally) and NPC International, a Pizza Hut franchisee, became the top franchise company, again, with sales of $845 million, up 22.5 per cent nominally over 2008.

For more information on the study, “2010 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report,” click here.

 

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