Economical The U.S.

fast food industry is by far the largest in the world, spawning global fast food brands such as McDonalds, Burger King, Subway and Wendys. In 2012, the fast food industry generated total revenue of 195.19 billion U.S. dollars in more than 300,000 restaurants, employing 4 million people. Many of those establishments are operated as franchise restaurants, a concept that is very common in the fast food industry. A parent company, such as McDonalds, Burger King, Subway and Wendys permits its franchisees to operate branded restaurants in exchange for a franchise fee or a share of the revenue. Franchisees are supplied with uniform ingredients by the parent company or its suppliers and are typically obliged to follow strict operational guidelines. In 2012, Subway was the market leader in the U.S. fast food industry; other major players include Wendys, Starbucks, Burger King, and Doctors Associates, the company behind Subway. All these major players combined accounted for less than half of the industrys revenue in 2012, indicating a highly competitive industry with a low degree of concentration. Over the last decade there has been increased focus on the quality of food served in fast food restaurants. Typically highly processed and industrial in preparation, Fast food companies have responded by adopting healthier choices and have had some measure of success, but the shadow of bad press still hangs over the industry. Rising commodity prices have also significantly crunched many fast food franchises. With food and beverage inputs making up approximately 33% of costs, higher prices for livestock, corn, wheat and more have seriously shrunk margins over the past decade. In such a fiercely competitive space it is impossible to force a price increase on customers, so profit margins are often south of 10%. The recent economic recession did lower commodity prices, but the recession brought on its own complications, and now prices for commodity inputs are on the rise again. Fast food had been thought to be largely recession proof, and indeed the industry did not suffer nearly as much as other discretionary spending sectors. In fact, there was some increase in consumer visits as people choose cheaper fast food options over fast casual or traditional restaurant choices. But overall, the recession hurt spending, and consumers overall purchased less with each trip. Fast food franchises fared reasonably well but still felt some pain. Busy citizens still need quick meal options, and fast food restaurants are fighting these challenges with gusto. Now offering healthy choices to battle the stigma of unhealthy food, some quick service restaurants now focus on fresh or organic products. From franchises focused solely on salads or healthy wraps to the lower calorie options offered at traditional burger franchises such as Wendys or McDonalds, consumers are able to make better choicesif they want! Fast food franchises are also focusing on expanding into new product lines, such as the coffee initiative in the McCafe. Intended to offer competition to Starbucks, McDonalds is luring customers back into their stores, hoping they will purchase food as well. Many franchises have been exploring other meal times such as

breakfast and the mid-afternoon snack for growth opportunities and to increase real estate utilization.

The industry is most effectively battling saturation within the United States by creating a much more diverse range of offerings. Despite the economic turmoil, the US
fast food industry is growing at a faster pace than it was growing previously

Economic Performance
Burger king

Revenue

US$2.33 billion

Operating income

US$363.0 million

Net income

US$48.8 million (2012)

Total assets

US$5.58 billion

Total equity

US$1.45 billion

Source- www.sec.gov.com

Mc Donalds

Revenue

US$ 7152.4 million (2012)

Operating income

US$ 2287.2 million(2012) US$ 1455.0 (2012)

Net income

Total assets

US$ 3384.2 million (2012)

Total equity

US$ 13884.1 million (2012)

Employees

420,000

Source- www.sec.gov.com

KFC

Revenue Employees

US$ 9.5 billion (2012) 190,000

Source- Wikipedia

Wendys

Revenue

US$ 02.431 billion (2011

Operating income

US$ 0137.1 million (2011)

Net income

US$ 009.9 million (2011)

Total assets

US$ 4.301 billion (2011)

Total equity

US$ 01.996 billion (2011)

Employees

42,800 (january 1st, 2012)

Source- Wikipedia

Subway

Revenue

$16.2 billion US$ (2010)

Source- Wikipedia

Conclusion Future growth in the fast-food restaurant industry depends on how well retailers are able to innovate, provide value for money, and keep up and surpass competitors. People are now becoming more price-conscious, particularly
about the food products, and are shifting to fast food joints from their traditional habits of eating out at restaurants frequently.

Despite the downturn in the economy, the fast food industry will remain a cornerstone of the economy, representing 4% of the US GDP and employing 10% of the US workforce.

Sources http://www.franchisehelp.com/industry-reports/fast-food-industry-report.