2010 QSR 50
1Once smoothies and frappés were in the pipeline, McDonald’s wasted no time making another splash with beverages. Reports that the chain would reprice all sodas at $1 initially drew scoffing—from franchisees as much as competitors. But within weeks the home office confirmed to QSR that “many local markets” had already adopted the discount. Now units are being revamped into places where you might kick back with your latte, frappé, or$1 Coke.
2Subway’s success simply can’t be stopped. So far this year, the company has opened more than 1,000 new locations around the world, crossed the milestone of 33,000 locations and premiered its new breakfast menu at about 25,000 U.S. and Canadian stores. The only potential chink in the brand’s armor? Oversaturation.
3The roll out of a new charbroiler, the foundation of Burger King’s open-flame cooking process, was completed last year, opening the menu to products like ribs and stuffed burgers. But it remains to be seen if the company will rally a franchisee community that all but yelled “Death to the King!” during the past year’s deep discounting. Some fear the brand has conditioned customers to shop for price, quality be damned.
4Wendy’s is focusing on prepping for a breakfast re-entry and what CEO Roland Smith termed a “significant” facelift for stores. But the new a.m. lineup won’t be available systemwide until late 2011. Meanwhile, the brand’s new owners have vowed to raise comp sales by alternating limited-time deals with premium options. The chain is also following Starbucks’ lead in setting prices on a store-by-store basis.
5After a whirlwind year for Starbucks, expect more of the same, say executives of the resurging coffee brand. Efforts to sustain the turnaround will bring more health-oriented products, along with higher-quality food, says CEO Howard Schultz. Meanwhile, the brand is reaping the benefits from its revamped loyalty program, My Starbucks Rewards, the No. 1 reason customers say they visit the brand more often than they did six months earlier.
6Taco Bell officials call them “sales layers,” the departures from business-as-usual for the Big Tamale of Yum! Brands’ portfolio. The chain bid for the health-minded by trumpeting a Drive-Thru Diet Menu and, more recently, it’s expanded tests of breakfast and tinkered with a do-it-yourself taco bar that feeds four for $14.99. Management hints that more menu departures may be on the way.
7The transformation of Dunkin’ Donuts into a broad-menu contender with a doughnut bent is quickening. The past year brought the sort of new products you might expect from a burger or sub specialist, like chicken and tuna wraps, a value menu, and a new snack called bagel twists. Meanwhile, Dunkin’ grew faster than many of the full-menu brands, with 171 domestic units added during ’09 and 131 more in the franchise pipeline.
8Follow this zen logic, Grasshopper: Pizza Hut’s growth will come not from pizza, but from wings and pasta. But the challenge of the moment, execs cryptically point out, is reviving pizza sales. If that doesn’t lead to head scratching, consider that officials want to improve the perceived value of pies as a means of boosting wing and pasta sales. So they added a permanent discount, the $10 Any Pizza deal. Huh?
9With KFC, “we have our work cut out for us,” acknowledged David Novak, CEO of franchisor Yum! Brands. The daunting to-do list includes improving operations, consumer perceptions, and menu appeal. The home office is hoping to improve the appeal and service of units by providing additional field-level support. Already visible is the brand’s effort to be viewed as a bargain option, most clearly with the new value menu.
10Hammered more than most chains by the economy, Sonic hopes to rebound by playing up its quick-service quirks. Marketing has focused on points of difference like the use of roller skaters to serve meals car-side. One of the few major chains to feature hot dogs, Sonic bulked up its Coney to four ounces and made it a true footlong. The chain hints about defending its rep as a beverage innovator by uncorking new selections.