“A quick service restaurant (QSR) within the industry (also known as a fast-food restaurant), is a specific type of restaurant that serves fast food cuisine and has minimal table service. The food served in fast food restaurants is typically part of a ‘meat-sweet diet’, offered from a limited menu, cooked in bulk in advance and kept hot, finished and packaged to order, and usually available for take away, though seating may be provided.” (Wikipedia)
Primary differences between Quick Service Restaurants and Fast Casual Restaurants center around the quality of food and dine-in versus carryout/drive through ratios. While Fast Casual restaurants – like QSR’s – only offer limited table service, they maintain a higher numbers of customers who consume their food on-site. They may also offer a higher “quality” of food, closer to a traditional restaurant, with less frozen or processed ingredients. Fast Casual is attempts to bring the convenience of the QSR together with the food experience of the traditional restaurant.
The most common ownership model for Quick Service Restaurants is the franchise model. According to Statista, there were 199,549 QSR franchise locations in the US at the end of 2019. Up from 150,291 in 2007. Franchise owners pay a one-time fee and ongoing royalties for the ability to use franchisor trademarks, recipes, business practices, etc. To become a franchise owner, you must qualify based on the specific criteria of the franchisor (initial payment, cash reserves, background checks, etc.).
QSR ownership costs vary widely depending on brand. Subway for example, may cost as little as $125,000 while American staples such as McDonald’s can run up to $2.2 million. Your startup costs will depend on geography/real estate, equipment, labor costs, signage, style of decor, landscaping and technology. Royalties run from 4% to 5.5% on average and marketing fees are 4%-5% (monthly gross sales).
While some QSR technology decisions are made by the franchisor and distributed to the franchisees, it depends on the brand as to how much is controlled at the corporate level. At a minimum, things like network, phone systems, payment systems (card swipes) and others are procured by the individual franchisee – hence the difference between locations. Many QSR owners hire an IT services firm to take care of it all.
There is a lot of competition out there in the QSR space. Whether you are thinking about becoming a franchise owner or launching your own QSR brand and franchising it out, we recommend you check out the top 50 QSR’s in the market today. The list is provided annually by QSR Magazine and can be accessed here.