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The world’s largest fast-food restaurant chain is not the one you might expect …

29 August 2018

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by Anchor

According to World Atlas data, the biggest fast-food restaurant chain in the world is not McDonald’s as one might expect, but rather US sandwich-maker, Subway. World Atlas describes Subway as the largest and fastest-growing restaurant chain in the world with 43,912 restaurants in 112 countries and territories (It has c. 25,549 outlets in the US alone). A fast food (or quick service) restaurant is defined by World Atlas as one with “minimal table service and cuisine that is quickly prepared”, while it defines a chain as “a group of related restaurants based in different locations that are operated either by franchise agreements or under shared corporate ownership such as McDonald’s in the US”. Usually these types of restaurants are built to a specific prototype and offer customary services and menus.

Research firm, Datafiniti in June also released a list of the largest fast-food chains in the US, based on how many locations each has in that country, and this study also found that Subway was the largest chain in the US. Subway locations account for 18.5% of all US fast-food restaurants with McDonald’s not far behind at 11.3%. Together, these two restaurants dominate the US fast-food industry with the nearest runner-up being Burger King, which accounts for 5.7% of all fast-food restaurants in the US.

Subway predominantly sells submarine sandwiches (known as subs) and salads. It is privately held, owned, and operated by Doctors Associates Inc. One of the reasons why it’s the largest in terms of locations likely has to do with the cost of opening a Subway franchise. In 2018 the cost stood at $147,000-$321,000 vs McDonald’s franchise starting costs of $1mn to $2.2mn (CNBC data). In addition, less training is required for Subway staff since they don’t need to cook, while McDonald’s staff require more training.

Nevertheless, while Subway might be the biggest in terms of locations this hasn’t necessarily translated into higher sales. According to CNBC, despite its size, Subway’s sales continue to lag those of its better-known competitors such as McDonald’s and Starbucks. In addition, its sales have declined every year since 2014 (Subway’s total sales in that year stood at $11.9bn vs McDonalds and Starbucks’ c. $35.45bn and $13.3bn, respectively). Subway’s sales have only gone down from there, while chains such as McDonald’s and Starbucks have mostly grown their sales over the same period. Subway foot traffic is also reportedly down 7.6% over the last 12 months, according to Technomic, a food industry market research firm. Shortly after this slump began, Subway started closing some of its stores (350 in 2016; 800-plus in 2017 and a further c. 500 this year). CNBC notes that industry analysts point to several reasons for this, with a lack of innovation being the main culprit. While other fast-food chains including KFC, McDonald’s and Starbucks continuously change their menus and store designs, Subway lags behind (it announced its first major redesign called Fresh Forward, in nearly two decades, last year).

In terms of the top-five fast food chains globally, Subway is followed by McDonald’s which is currently the second-largest restaurant chain in the world, available in 119 countries with c. 37,240 outlets. Some interesting statistics on McDonald’s courtesy of World Atlas include that they serve 75 hamburgers every second, one in eight workers in the US has been hired by McDonald’s and the restaurant’s 70mn daily customers are more than the entire population of France.

Starbucks with its 27,339 locations comes in third spot, while KFC and Burger King round out the top-5 fast food chains with 20,404 and c. 15,000 worldwide locations, respectively. KFC operates in 123 countries and territories and is part of Yum! Brands, which also owns Taco Bell and Pizza Hut. Burger King is estimated to have outlets in 100 countries with c. 50% of these outlets in the US, and 99.5% of these not only privately operated but also privately owned.

The world’s largest fast-food restaurant chains: