Quick-service burger brands largely kept the momentum going in 2022 as the segment overall pulled in an impressive $185 billion in sales, blowing away the pre-pandemic performance of $157.2 billion in 2019. According to the newly released Franchise Times Top 400, total sales for the segment increased 5.1 percent last year. The annual ranking lists the largest U.S.-based franchise systems by global systemwide sales.
Holding strong at No. 1 overall, McDonald’s alone hit $118.2 billion in systemwide sales from its 40,275 global locations. U.S. sales, the company said in its 2022 annual report, benefited “primarily from strong average check growth driven by strategic menu price increase, successful menu and marketing promotions, and continued digital and delivery growth.” Burger King, the second-largest QSR burger brand, grew sales 8.7 percent, to $25.5 billion and also added 542 units to finish 2022 with 19,789 stores.
Quickly moving up the ranking is Culver’s, which jumped 15 spots to No. 37 thanks to a sales increase of 13.7 percent, to $2.8 billion. Regional brands The Habit Burger Grill and Freddy’s Frozen Custard & Steakburgers, meanwhile, are angling for a larger share of the market.
“We’re playing in a space that’s doing really well,” said Jack Hinchliffe, Habit’s chief marketing officer, and by offering what he said is a better-quality product with better service, the brand is winning with customers and pushing new development. Habit Burger did $661 million in systemwide sales last year, up 12.4 percent, and also added 31 units.
Habit Burger CMO Jack Hinchliffe says the company has gotten sharper with digital marketing, which serves to drive sales and customer engagement.
Acquired by Yum Brands in 2020, the company continued to “unlock potential” and benefit from shared services while maximizing its off-premises channels in 2022 with a fully integrated tech stack and intense focus on restaurant-level execution, Hinchliffe said. “Commitment to craft at scale is absolutely at the heart of everything we do.”
A shift in how the brand invests in digital marketing, with the aim of building deeper customer connections and personalizing the communication, has proved consequential, noted Hinchliffe. Local restaurant marketing is likewise one of the “critical levers” for the brand.
“We are operating in an incredibly crowded and cluttered category,” he said of the media and marketing landscape. “We won’t win by blindly spending on media; we need to be sharp and focused.”
At Freddy’s, which grew sales 6.4 percent to $808 million from 456 units, CEO Chris Dull said a supply chain initiative and complete review of vendors yielded major savings for the system. Last year the company did a request for proposal for all menu items and other supplies such as packaging and was able to drive down costs for franchisees. The company also invested in a pricing study and took price in the back half of 2021 and into 2022, Dull said.
The brand launched a new web ordering platform, app and loyalty program in the summer of 2022, with more than 1.3 million members now in the loyalty program. That’s up from 300,000 who used the prior program, Dull said.
Another key move last year was the hiring of Freddy’s first chef. Rick Petralia came on as the director of menu strategy and innovation and helped created a program of limited-time offers to boost topline sales.
“It’s done a nice job of driving traffic as well as driving average check,” said Dull of the LTOs, including a French onion steakburger. “Our LTO program has been tremendously successful.”
Better burgers aim to snag market share
Consumers continued to spread their dollars around the burger category in 2022. The better burger segment’s $3.4 billion in sales is up 7.8 percent from the prior year, with BurgerFi the only concept to see the slightest of declines, down 0.1 percent.
Five Guys keeps its focus on serving its simple menu of burgers, hot dogs, fries and shakes, says CEO Jerry Murrell.
Fatburger and Mooyah Burgers, Fries & Shakes turned in moderate increases, with Fatburger growing sales 4.7 percent, to $146 million, and Mooyah finishing the year with $72 million in system sales, up 3 percent.
At segment leader Five Guys, CEO Jerry Murrell said the brand “just kept plugging along,” and didn’t roll out any flashy marketing campaigns or special offers to keep the sales engine running. Instead, it focused on serving its simple menu of burgers, hot dogs, fries and shakes, which judging by the sales was the right move.
Five Guys crossed the $3 billion mark in 2022, thanks to its 8.6 percent sales increase and addition of 67 units. Its 1,800 global units are by far the most in the better burger segment. For a system largely without drive-thrus, delivery continues to grow and Murrell noted he’s “truly amazed at how quickly our crew adapted,” adding the company did improve its digital
prowess to support expanding off-premises channels. As it fills in and develops new markets, Five Guys typically eschews large, multi-concept operators, preferring instead to “keep them in the Five Guys family,” said Murrell.
“When those big guys come to us, we usually turn them down,” he continued. “They have their own ideas about how to run a Five Guys,” which can lead to problems enforcing system standards.