In this article, we will be covering the 12 Worst Performing Fast Food Chains In America. If you want to skip our detailed analysis of the fast food and quick service restaurant sector, you can go directly to the 5 Worst Performing Fast Food Chains In America.
Over the past few decades, fast food has become an important part of life in the United States. Not surprisingly, the fast food and quick service restaurant business is extremely competitive today. People are always looking for food that is inexpensive, appealing, full of taste, and fast.
A number of fast food chains and quick service restaurants in America have become institutions over the years. With new competition, sometimes the old players are pushed out. And sometimes the new ones don’t really have what it takes to make it in the fast and competitive fast food industry. In this article, we will be looking at 12 fast food restaurant chains in the US that have the highest number of restaurant locations closures, but first let’s take a look at the fast food and quick service restaurant industry.
The Fast Food and Quick Service Restaurant Industry to Reach $320 Billion
Previously, the economic slowdown caused by the COVID-19 led to some of the biggest restaurant chains to file for bankruptcies in 2020. Food delivery services and online ordering helped some of the biggest fast food companies stay alive during the peak of the COVID-19 pandemic. In one of our previous articles, 25 Most Valuable Food Companies in The World, we also discussed briefly how the food industry is currently facing challenges with regards to food safety concerns. However, we mentioned that the continuously growing global population remains one of the key drivers of growth in the food and restaurant industry.
According to Research and Markets, the global fast food and quick service restaurant market was valued at $243.9 billion in the year 2022. The highly competitive market is expected to grow at a compound annual growth rate (CAGR) of 4.7% during 2023-2028, reaching $319.7 billion by the end of the forecasted period. Inclination of consumers, mainly millennials, towards fast food items and ready-to-eat meals is one of the biggest factors that is expected to help the market to flourish in the coming years. The increasing working population and their hectic schedules have significantly heightened the consumption of fast food in a number of countries around the world. The demand for fast food and quick service items is on the rise, and this remains one of the key factors creating a more positive outlook for the market. In addition to this, factors such as digitization and modernization of the restaurant outlets, combined with the utilization of digital sales terminals and touchscreen kiosks, are expected to further augment market growth.
Some restaurant and food company stocks that are expected to become a popular choice during this period include McDonald's Corporation (NYSE:MCD), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Starbucks Corporation (NASDAQ:SBUX).
While the global food and restaurant industry was one of the hardest hit by the COVID-19 crisis, signs of recovery continue to create a positive outlook for the market as some of the biggest names in the industry shift their focus towards growth. On March 6, Reuters reported that Starbucks Corporation (NASDAQ:SBUX) will be looking to open as many as 100 new outlets in the UK. The corporation is reportedly on track to invest GBP 30 million in their UK operations for the launch of new locations as well as renovation of their more than 1000 already existing outlets.
With regards to the market in China, here are some comments from Starbucks Corporation’s (NASDAQ:SBUX) Q2 2023 earnings call:
“Moving on to China. Q2 marked a significant turning point when we finally began to emerge from 3 years of unprecedented COVID disruptions, embarking on the recovery journey that we have envisioned. We saw a robust recovery in Q2, reinforcing the resilience of our partners, the strength of our brand and the close relationships that we have built with our customers.
However, global inflation and rising food prices has caused problems for some of the top contenders in the fast food industry. Despite being one of thebiggest fast food companies in the world, Subway had to close more than a thousand of their locations in the US in recent years. On May 1, Reuters published anarticle that claimed that the Subway chain of restaurants declined by 2.7% in the US due to closures in 2022.
On the other hand, on July 24, Reuters posted that restaurant chains like McDonald's Corporation (NYSE:MCD) and Chipotle Mexican Grill, Inc. (NYSE:CMG) are set to report strong earnings in the fiscal second half of this year as the prices of commodities such as chicken and dairy have eased. The post also claims that data from Placer.ai showed that visits to McDonald's Corporation (NYSE:MCD) increased by 8.4% in the second quarter, while visits to Chipotle Mexican Grill, Inc. (NYSE:CMG) rose by 15.7%.
On July 27, McDonald's Corporation (NYSE:MCD) reported strong earnings for the fiscal second quarter of 2023. The company reported earnings per share (EPS) of $3.17, beating the EPS estimates by $0.38. The company reported a revenue of $6.5 billion and surpassed revenue estimates by $202.69 million.
For this list, we ranked the 12 worst performing fast food chains in America based on location closures and the loss of restaurant locations since 2018. To find out the number of locations for fast food chains in 2018, we used this sheet by QSR magazine. For getting the number of locations of fast food chains in the US in 2022, we used data available on Restaurant Business Online. We looked at the total number of locations for each of the fast food chains in 2018 as well as in 2022 in order to calculate the loss of units over the 4 year period.
In addition to the websites mentioned above, we also consulted other lists and data available on the internet to cross check claims with regards to the number of locations in the US for each of the fast food chains in both the respective years. The 12 worst performing fast food chains in America based on loss of restaurant locations in the country are listed below in ascending order.
12 Worst Performing Fast Food Chains In America
12. Steak 'n Shake
Loss of locations in the US: 115
As a wholly owned subsidiary of Biglari Holdings Inc. (NYSE:BH), Steak 'n Shake is a casual quick service restaurant chain based in the US. The fast food chain is best known as the pioneer of the concept of premium steak burgers and handmade milkshakes.
Between 2018 to 2022, the Steak 'n Shake chain lost as many as 115 locations in the US. This took their total number of the locations in the country from 594 units in 2018 to just 479 units in 2022.
11. Auntie Anne's
Loss of locations in the US: 116
Auntie Anne's is an American franchised chain owned by a private company known as Focus Brands. The chain is known for their fresh pretzels, but also offers other products such as pizza, dips, and beverages.
In 2018, the pretzel shop chain had as many as 1,295 restaurants in the US. Unfortunately, this figure for the number of locations lost 116 units and shrunk down to only 1,179 locations by 2022.
10. Boston Market
Loss of locations in the US: 154
Previously known as Boston Chicken, Boston Market is an American fast casual chain which was recently purchased by Engage brands LLC in 2020. Boston Market is best known for their homestyle meals in a take out format and offers a wide variety of items including chicken, ham, turkey, and meatloaf as well as a number of side dishes.
In 2018, the Boston Market restaurant chain had 454 locations in the US. However, this once-popular chicken restaurant chain lost as many as 154 units to reach 300 locations in 2022.
9. Kentucky Fried Chicken
Loss of locations in the US: 156
Kentucky Fried Chicken, or simply KFC, is an American fast food restaurant chain that specializes in fried chicken. The restaurant chain is a subsidiary of Yum! Brands, Inc. (NYSE:YUM) and one of the largest fast food chains in the world.
Between 2018 and 2022 KFC lost as many as 156 units and their number of locations decreased from 4,074 locations in 2018 to 3,918 in 2022 in the US. The famous fast food chain will be looking to remove some items from their menu with the aim to simplify their menu this year.
Some of the other popular companies in the US food industry are McDonald's Corporation (NYSE:MCD), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Starbucks Corporation (NASDAQ:SBUX).
8. Hardee’s
Loss of locations in the US: 157
Operated by privately held CKE Restaurants Holdings, Inc, Hardee's is an American fast-food restaurant chain that specializes in burgers, fries, shakes, and chicken sandwiches.
Between 2018 and 2022, the chain lost as many as 157 locations in the US. The number of locations in the country went down from 1,864 in 2018 to 1,707 in 2022.
7. Jimmy John’s
Loss of locations in the US: 166
Owned and franchised by Inspire Brands LLC, Jimmy John’s is a fast food restaurant chain based in the US. With numerous bread options and various sandwich flavors, Jimmy John's has become one of the most popular fast food retailers in the country.
However, between 2018 and 2022 Jimmy John’s lost 166 restaurant locations across America, taking their total number of locations in the US from 2,803 in 2018 to 2,637 in 2022.
6. Papa Murphy’s
Loss of locations in the US: 269
Papa Murphy’s, as a subsidiary of Papa Murphy's Holdings, Inc. (NASDAQ:FRSH), is one of the largest pizza chains based in the US. Papa Murphy’s is best known as the pioneer of the take-and-bake pizza concept.
In 2018, there were 1,437 Papa Murphy’s locations in the US. However, restaurant closures, especially since the COVID-19 pandemic, saw the figure fall by 269 units to reach only 1,168 restaurant chain locations in 2022.
For investors looking to increase their exposure to the fast food industry, some stocks they can look at include McDonald's Corporation (NYSE:MCD), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Starbucks Corporation (NASDAQ:SBUX).
