McDonald’s Versus Burger King: Whose Franchisees Perform Better?

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MCD: McDonald's logo
MCD
McDonald's

McDonald’s (NYSE:MCD) earns almost an eight times higher revenue than Burger King (NYSE:QSR), owing to twice the number of franchised restaurants and comparatively larger footfall. However, lately McDonald’s has found itself struggling, owing to an industry-wide slowdown in sales and people’s changing preference towards organic and healthier food. Furthermore, the average number of customers visiting McDonald’s annually has been falling consistently. In 2015, the number had come down to 650,700, as compared to the high of 740,000 in 2011.

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On the other hand, Burger King (BK), owned by Restaurant Brands International, has successfully turned around its business, growing at a much higher annual growth rate than McDonald’s meager 0.7% per annum. This growth, in part, is attributable to the company’s quirky and innovative menu items like Mac n’ Cheetos, Oscar Mayer hot dogs, Egg-normous burrito, and Chicken Fries Rings which have succeeded in attracting customers. Furthermore, BK’s store expansion plans in China and other developing countries have supported the company’s revenues.

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Consequently, we see that although McDonald’s has a much higher average revenue per franchised restaurant, its annual growth rate has slowed down recently.
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Have more questions on McDonald’s? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for McDonald’s

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