15 Best American Restaurants Listed By Unit Count (2024)

Introduction

The restaurant franchise model has existed in the world for a long time. Franchising’s first example was in England and France when the Crown owned land and gave rights to people to manage their property.

From those times, the franchise business has expanded massively and now encompasses a big portion of businesses. In 2020, there were an estimated 753,770 franchise establishments in the United States. 30%+ of these establishments are quick-service restaurants and as many as 10% are sit-down restaurant chains.

In this article, we’re going to explore the 15 top fast food restaurant (QSR) franchises in the U.S. by restaurant count. We’re not going to look at locations that only offer affiliate partner roles, where you only manage the location but do not own it outright like Chick-Fil-A or Steak ‘n Shake.

Our list is not for restaurant-goers/ consumers! This is a list for serious investors looking to get into the restaurant business. For example, Subway does NOT have the best product but it does have the most locations in the United States.

Unit count and brand presence are just two of the many factors to consider when investing in an American restaurant chain. It’s important to also track net unit growth, franchise payback period, franchise cost, and franchisee satisfaction.

Curious to see what the top restaurant chains are in the U.S.? Let’s dive in!

Top Restaurant Franchises

Subway

In 1965, a college freshman named Fred Deluca received an initial investment of $1,000 from Dr. Peter Buck, a nuclear physicist, to open a submarine sandwich shop to help pay his tuition. What started as a small sandwich restaurant called Pete’s Subway in Bridgeport, Connecticut is currently the world’s largest submarine sandwich chain. Today, there are more than 40,000 locations of the Subway Franchise around the world serving fresh, affordable, made-to-order sandwiches.

Based on the median multiple of 0.31 and net sales averaging $397,600 between 2019 and 2020, a Subway Franchise would sell for $123,256. The resale value is less than the midpoint investment of $341,975 by over $200,000 which indicates a very low resale value.

Many Subway franchised outlets closed down over the last three years. This is an indication that the franchisees were not performing well, especially during the pandemic when there was a net loss of 1,600 locations. In addition, it takes a relatively long time to recoup your initial investment with profit margins of less than 20%. Based on the data from 2020, it could take you up to 12 years to recoup your initial Subway franchise investment. Subway also does not offer territory protection so outlets eat into each other’s sales when they are very close.

Read our full report on Subway here and watch our video on why we do not recommend buying a Subway franchise.

McDonald’s Franchises

McDonald’s is the quintessential American fast-food chain restaurant. It was founded in 1940 as a restaurant operated by Richard and Maurice McDonald in San Bernardino, California, United States. Since then, they have been serving hamburgers, chicken nuggets, french fries, milkshakes, and ice cream. In the present day, it has over 36,000 locations in over 100 countries around the world.

The median annual sales volume of franchised McDonald’s restaurants open at least 1 year as of December 31, 2021, was $3,366,000 during 2021 —a $458,000 increase compared with the amount recorded in the previous FDD regarding 2020 numbers. With a profit margin of 10% or more, it would take about 8.5 years or less to recoup your initial investment.

When you go to sell a McDonald’s franchise based on the median multiple of 0.34 and net sales of $2,908,000 in 2020, it would sell for $988,720. This is lower than the midpoint initial investment of $1,813,897 by about $800k. Your business would therefore sell for less than your initial total investment.

There are over 36,000 McDonald’s franchises around the world with about 13,000 of them in the United States. The company has a long history of franchising dating back to 1955 which has played a big role in its success over time.

We analyzed the franchise for you. Read more about it here.

Dunkin’

Dunkin’ Donuts, also known as Dunkin’ and DD, is an American multinational coffee and doughnut chain. It was founded by Bill Rosenberg in Quincy, MA in 1950. It began rebranding as a “beverage-led company”, and was renamed Dunkin’, in 2019 with stores in the U.S. beginning to use the new name. The rebranding is to eventually be rolled out to all international locations.

With approximately 12,900 locations in 42 countries, Dunkin’ is one of the largest coffee shop chains in the world. At the close of 2021, there were 8,000+ Dunkin’ franchised locations in the US. It is led in the US by David Hoffmann as CEO & President and former CEO Nigel Travis in the role of Executive Chairman.

Based on the median sales provided by Dunkin’s Store Front Type franchise locations, at an average of a 15% profit margin it will take around 8.5 years to recoup your investment. This is longer than some other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

When you go to sell a Dunkin’ Donuts franchise based on the sales/price multiple of .44 and net median sales in 2021 of $1,420,783, it would sell for $625,144. This is lower than the midpoint investment of $954,550.

Dunkin’ Donuts offers people the opportunity to be a part of a business that has high net sales and is rapidly expanding. It is impossible to understate the brand recognition that Dunkin’ has in the US market.

Read our 2022 analysis of Dunkin’ here.

Burger King

You have probably heard of Burger King, one of the biggest fast-food companies in the world. They mainly offer a wide variety of burgers and fries. Did you know it is a franchise? Yes, Burger King is a franchise with over 18,000 locations worldwide, of which about 7,000 are in the U.S. alone. Burger King Corporation was founded in 1954 in Florida and is based in Miami. It is an indirect subsidiary of Burger King Worldwide, located in Delaware.

After five years in the business, when you go to sell your franchise based on the median multiple of .34 and net sales average from 2019 of $1,351,000 it would sell for about $459,340. This is considerably lower than the average initial investment of $2,638,100.

To find out more about Burger King’s financials, read our full report.

Taco Bell Franchises

Taco Bell opened its first store in Downey, California in 1962 after its founder, Glen Bell, sold his former Taco store to his existing business partners. After having seen the success a business could make in selling tacos as the pilot dish on their menu, Bell decided to seek a larger challenge and instead developed the business model in place across all stores to this day that involves serving a variety of Mexican and Tex-Mex foods such as tacos, burritos, and nachos.

Franchising began two years after Bell opened his first Taco Bell store when Kermit Becky – a retired L.A. policeman – opened his own Taco Bell in Torrance, CA.  Today, Taco Bell is now a subsidiary of Yum! Brands —an American fast-food corporation that owns other famous franchises like Pizza Hut and KFC— and has over 6,800 franchised stores in the US and another 500 in international markets.

When evaluating a Taco Bell franchise’s potential for growth one does not need to go beyond Quick Service Restaurant numbers to better understand the prospect for success of the opportunity at hand. The fast-food industry generated $200 billion in revenues in 2015. The industry has since been expected to have an annual growth of 2.5% in the following subsequent years. Of these $200 billion in revenues, Mexican restaurants were responsible for 7% of the market share, and Taco Bell itself was ranked number 4 in QSR Magazine’s top 50 of 2020 losing only to McDonald’s, Chick-Fil-A, and Starbucks.

There are both pros and cons to investing in Taco Bell franchises. Taco Bell as a corporation is a profitable business, but it is unclear if this profitability extends to individual franchise units. After all, the lack of detail in their financial statements means that the only visible source of revenue is from franchise and license fees (along with affiliate royalty fees), and combined with the fact that Taco Bell has rather high royalty rates could be a negative sign for potential franchisees.

However, at the same time, Taco Bell has shown significant growth in the number of franchised units. They are opening significantly more stores than closing them down, which could point to a sustainable business model. However, it is important to note that this is only true for traditional, free-standing Taco Bell units — for Taco Bell Express franchises the number of units has actually been decreasing.

Investing in Taco Bell franchises is an interesting opportunity. Especially for individuals looking to make their way into the QSR industry. The prospects for growth and success within the industry and the Taco Bell brand itself, are extensive and a number of markets continue to be available as Taco Bell stores haven’t saturated their presence across the country yet. If you are an individual with previous business management experience and are willing to invest an amount ranging from $575,600 to $3,370,100 or more, the Taco Bell franchise is the right one for you!

Our analyst did an in-depth review of Taco Bell and its parent Yum! Brands which you can find here.

Pizza Hut

Pizza Hut franchise opened its first store in Wichita, Kansas in 1958. After its founders, brothers Dan and Frank Carney, borrowed $600 from their mother to finance their pizza dreams. Because their restaurant’s sign only had room for eight letters, the Carney brothers decided to name their concept “Pizza Hut”. A restaurant concept that created food they proudly served and delivered at a fast pace. Franchising began one year later.

Today, Pizza Hut is a subsidiary of Yum! Brands, and has over 6,000 franchised stores in the US and another 11,000 in international markets.

Based on the average sales provided by Pizza Hut’s franchise locations, at an average of a 15% profit margin it will take between 4-9 years to recoup your investment depending on the type of your location. You may not get a 15% profit margin which would elongate getting a return on your investment. The time to recoup investments incorporates roughly a 2 year period to scale up the restaurant. This includes finding the location, building the restaurant, passing break even, and then reaching significant income.

When you go to sell a Pizza Hut carry-out franchise based on the median multiple of .34 and net sales of $1,022,000 it would sell for $347,480. This is significantly lower than the midpoint investment of $652,900.

However, as an owner of multiple Pizza Hut franchises, you do have the ability to make a profit. Pizza franchise owners with over $5 million in sales have a median multiple of .86. If you had 10 Pizza Hut franchises this would be $10.2 million in sales. Therefore, selling your multi-unit franchise system would amount to $8.8 million. The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators. If the seller averaged just $500,000 to open each carryout Pizza Hut, they could net over $3 million when the restaurants are sold!

Investing in Pizza Hut franchises is an interesting opportunity especially post COVID-19 pandemic. The entry investment of $367,000 is well suited for individuals looking to make their way into the QSR industry. The prospects for growth and success within the industry and the Pizza Hut brand itself, are extensive. Several markets continue to be available as they move forward with growing their presence across the country. If you have extensive management experience and plan to open 5 to 10+ Pizza Huts, it is worth evaluating as a franchise! Opening just one is hard to justify given the resale value and lengthy payback period.

Just like Taco Bell, our analyst did an in-depth review of Pizza Hut and its parent Yum! Brands which you can find here.

Domino’s Franchises

Domino’s is an American multinational pizza and fast-food chain founded in 1960. It is currently led by President David Brandon and CEO Richard Allison. It is headquartered in Ann Arbor, MI. Domino’s has stores in 92 countries which number more than 18,300. It has over 1,200 stores in the United Kingdom, 1,500+ in India, and almost 6,600 in the US.

Based on the median sales provided by Domino’s franchise locations, at an average of a 15% profit margin it will take around 5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

When you go to sell a Domino’s franchise based on the median multiple of .34 and net sales averaging between 2019 and 2020 of $1,153,773, it would sell for $392,282. This is very slightly lower than the midpoint investment of $419,475.

However, as an owner of multiple Domino’s franchised locations, you do have the ability to make a profit. Pizzeria owners with over $5 million in sales have a median multiple of 0.86. So, if you had 5 Domino’s franchises, amounting to $5,768,865 in sales, selling your multiunit franchise system would amount to $4,961,223. This is almost twice the estimated initial investment of $2,097,375.

Read our analysis of Domino’s to find out more.

Wendy’s

Wendy’s is one of the most recognizable restaurant brands in the world. It is famous for its hamburgers, sandwiches, fries, tenders, and milkshakes. Jim Cramer mentioned the Baconator, one of the most popular items, on his investment show numerous times.

Wendys Breakfast has been one of the ways the company in recent years has helped to diversify its revenue streams.

Based on Wendy’s 393 corporate-owned restaurants we are able to provide an estimate of how much a franchisee can expect to earn per location. The average revenues and margins the median gross profit percentage is 67%. The median gross sales are $2,147,824 and the median cost of sales is $691,594. This means that a franchisee can expect to earn a gross profit of more than $1.4 million as franchises typically make a little less than corporate-owned restaurants. Finally, the median EBITDA after rent is $379,285 for a corporate-owned restaurant. A Wendy’s franchisee should expect to make around $300,000 for a typical Wendy’s location after accounting for royalty payments.

Based on the median profits and upfront investment of opening Wendy’s franchises it is an excellent opportunity. Wendy’s franchise owner’s salary & compensation is about $300,000 per year. The national brand recognition Wendy’s has to offer and franchisees being able to recoup their initial investment within a couple of years make it a great opportunity. That said, it is extremely competitive to be able to open a franchise even if you meet the capital requirements. Wendy’s has very specific criteria they look for when granting licensing agreements most notably significant experience operating fast-food chains in the food and service industry.

Read our full analysis of Wendy’s here.

Dairy Queen Franchises

Dairy Queen is an American quick-service restaurant that is well known for its frozen treats. Founded in 1940 in Minnesota, Dairy Queen has grown into an international brand, with over 7,150 stores around the world today. Its current CEO is Troy Bader. Dairy Queen franchises in the United States operate under America Dairy Queen (ADQ), which is a subsidiary of International Dairy Queen (IDQ). In turn, IDQ is a subsidiary of multinational conglomerate Berkshire Hathaway, famously led by Warren Buffett.

In the most recent year of data, 2021, the average Dairy Queen under these conditions reported annual gross sales of $1,427,766. However, it should be noted that the sample size that this data is obtained from is quite small relative to the 1,952 stores that are currently open across the country. These sales figures may not be representative of the average Dairy Queen store since newer stores may have amenities that make them more appealing than older stores, or may be located in more desirable locations. However, the information above is useful for prospective franchisees who intend to open a new Dairy Queen store, rather than refurbishing an existing store.

While Dairy Queen is a well-established international brand, the 9-16 year timeframe that you could reasonably expect to recoup your initial investment may be a long period of time for one to wait. Other companies in the food and beverage industry may provide a better investment opportunity. Read what our analyst had to say about Dairy Cone.

Little Caesars

Little Caesars franchise is a take-out style pizza restaurant that sells pizza, chicken wings, “Crazy bread”, and other food-related products. The franchisor offers both individual franchise units as well as a “territory reservation agreement”, which is when a single investor can reserve an entire area of land to develop multiple Little Caesars restaurant franchises. It was founded in 1959 as a single, family-owned restaurant, and sold the first of its franchises in 1962. And nowadays, Little Caesars is the third fastest-growing pizza chain in the United States, behind competitors Pizza Hut and Domino’s Pizza. Mike Ilitch and his wife Marian Ilitch founded the company, and now Ilitch Holdings Inc. owns it.

According to their FDD, Little Caesars does not provide any “representations of a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.” The only financial information that Little Caesars provides is if an investor purchases an existing outlet, and Little Caesars will only provide information about that specific establishment.

One area to consider before investing in a Little Caesars pizza franchise is the lack of financial information that is provided upfront. Although the law does not require this aspect of the Franchise Disclosure Document, Item 19, it is unusual for a good-standing franchisor to exclude financial performance information from prospective investors.

At the same time, the expansion of Little Caesars units across the United States mainly seems to be occurring from the company-owned end rather than in franchises. After all, in 2020 alone 23 franchised units closed down for various units, while 21 company-owned units were added to the enterprise. A closer look at their FDD reveals that 15 of the new company-owned outlets that were opened were in fact reacquired from franchisees. Although there could be several reasons behind this trend, one possible explanation is that Little Caesars is shifting resources AWAY from franchise development and shifting most of their energy and resources towards internal development.

Read the full analysis of Little Caesars here.

KFC Franchises

Kentucky Fried Chicken was founded by Harland Sanders in 1930 when he inaugurated the first Sanders Court & Café in Corbin, Kentucky. After six years of success, Sanders received the Kentucky Colonel position for supplying extensive resources to his community.

By 1952, his business had outgrown itself. It had expanded to such an extent that he decided to grant the first of KFC’s franchises to his friend, Pete Harman. In turn, he opened the first KFC franchise later that year in Salt Lake City, Utah.

Throughout these 68 years, the franchise has expanded to over 20,000 stores in 145 countries. Which are committed to spreading the unique Colonel Sanders chicken dinners both domestically and internationally.  KFC is currently headquartered in Plano, Texas, and is run by CEO, Sabir Sami. As of 2021, KFC has 3900+ locations across the USA.

Based on the median sales provided by KFC’s franchise locations, at an average of a 15% profit margin it will take around 13.5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

When you go to sell one of the KFC franchises based on the median multiple of .34 and net sales in 2021 of $1,279,276, it would sell for $434,953. This is significantly lower than the midpoint investment of $2,302,075.

Find out more about the financials of the franchisor and its parent, Yum! Brands here.

Sonic Drive-In

These franchises are distinctive drive-in restaurants focusing on a unique menu of quality, made-to-order food products, and innovative technology. Sonic Franchising LLC (“Sonic”) licenses the operation of Sonic restaurants. It features a variety of items such as specialty drinks, ice cream desserts, cheeseburgers, chicken entrees, hot dogs, and more.

The Sonic brand began in the early 1950s. Sonic has offered franchises since 1974. As of January 2021, over 3,500 Sonic restaurants were operating in 46 states in the United States. Franchisees own and operate 3,251 restaurants. An affiliate of Sonic owns and operates 271 restaurants.

In 2020 an average Sonic franchise had an EBITDAR (Earnings Before Interest Taxes Depreciation Appreciation Rent) of $312,230 on $349,949 of sales. This represents a margin of 22.9% but the franchisee will still need to pay for interest, taxes, and rent which would most likely bring the margin to around 13%. Therefore on a midpoint investment of $2,389,950 and a profit margin of 13%, it would take 14.5 years to get a return on your initial investment.

When you go to sell Sonic franchises based on a net sales multiple of 0.34 and net sales averaging $1,361,175 in 2020 it would sell for $462,000. This is significantly lower than the average investment of $2,389,950. The initial investment includes the building costs but not the land costs. Most Sonic franchisees are making their return back from building the Sonic from the ground up. And selling the building together with the land to a REIT (real estate investment trust).

With a powerful restaurant firm like Inspire Brands supporting and backing the Sonic franchise and their commitment to keeping their restaurants updated with new technology and automation to ensure further customer satisfaction, Sonic is better positioned than most in the fast-food industry.

Arby’s

Arby’s began its story with the two brothers Forrest and Leroy Raffel. They followed their passion for the food industry by opening a food-service consulting firm in 1950. Despite initially feeling fulfilled by their career path, the idea of opening a restaurant was always at present.

One day, the two brothers had the idea to open a service restaurant. This would mainly focus on serving roast beef sandwiches. From there, Arby’s opened its doors to its first restaurant in 1964 in Boardman, Ohio.

The name in particular was a deviation from the first letters of the brother’s iconic title “R and B”. 70 years later, the franchise has over 3,400 restaurants across 4 continents. Additionally, Arby’s is currently headquartered in Atlanta, GA.

Based on the median sales provided by Arby’s franchise locations, at an average of a 15% profit margin it will take around 10 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

When you go to sell an Arby’s freestanding franchise based on the median multiple of .55 and net sales in 2021 of $1,296,613, it would sell for $713,137. This is significantly lower than the midpoint investment of $713,137.

Papa John’s Franchises

Papa John’s began its story in Jeffersonville, Indiana, in 1984. When its founder, John Schnatter, proposed to his business partner that they begin selling high-quality pizza. In their bar in order to supplement revenues.

After seeing a growing success, Schnatter and his partner decided to open their own pizza store one year later. The idea behind the concept’s success was a formula. That remains in the company to this day: sell high-quality pizza at a competitive price. Franchising began in 1986, and 10 years later the company was inaugurating its thousandth store.

Based on the median sales provided by Papa John’s franchise locations, at an average of a 15% profit margin it will take around 5.5 years to recoup your investment. This is faster than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

When you go to sell a Papa John’s franchise based on the median multiple of .55 and net sales in 2021 of $1,101,127, it would sell for $605,619. This is significantly lower than the midpoint investment of $494,530.

Jimmy John’s

Jimmy John’s franchises sell gourmet sandwiches and also offer freshly baked bread and other food and beverage products. It was founded in Atlanta, GA. It serves a niche market as it specializes in delivering to College students.

There are currently over 2600 Jimmy John‘s across the country. Paul J. Brown has been Chief Executive Officer of Jimmy John’s since 2018. Previously he was CEO of the successful Arby’s Restaurant Group so you know he will do a good job.

The highest-earning franchise made around $1,903,720 million in revenue whereas the lowest-earning franchise made $159,565. These numbers indicate that potential earnings can vary significantly. And it depends on factors such as locations and how well you run the business.

Based on a midpoint investment of $437,350 with estimated profits of $109,416 at a 15% profit margin, it would take about 7 years to recoup your investment.

After a few years in the business, when you go to sell your franchise based on the median multiple of .34 and net sales of $729,442 it would sell for about $248,010. This is about 56% of the midpoint initial investment of $437,350.

The median multiple franchises selling more than $5 million is .86. If you had 10 Jimmy John’s franchises (about $7,294,420 in sales), assuming that every location has the same initial investment would have you spend $4,373,500. You could sell for $6,273,201, therefore making a big profit.

If you open a Jimmy John’s franchise you can recoup your investment in 5 to 8 years depending on profitability. Which is a lot faster than other franchises in the food and beverage industry. We must prepare yourself to open multiple locations if you want to make a profit when selling your franchise.

Something to keep in mind is the decline in the number of units. Even though most of it is due to the pandemic and schools going remote, the decline started in 2019 when COVID was not yet a factor.

Read the full Jimmy John’s analysis here.

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