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Fast-Food and Quick Service Restaurants Industry

Fast-Food and Quick Service Restaurants. Includes companies who provide a casual dining experience in a compressed time frame and for a generally low cost.Standard

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Fast-Food and Quick Service Restaurants Industry

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    1. Fast-Food and Quick Service Restaurants Industry

    2. Fast-Food and Quick Service Restaurants Includes companies who provide a casual dining experience in a compressed time frame and for a generally low cost. Standard & Poor’s expects that this segment will somewhat benefit from difficult economic times

    3. Threat of Entry Many chains grow by franchising which decrease the barriers of entry. Which increases the popularity among small-scale entrepreneurs. Money to pay fees and costs involved. High fixed costs. Product differentiation Value Menu

    4. Buyers Busy people who are becoming more health conscious Depends on consumer spending Travelers In 2007, 15% of quick service restaurant sales was from travelers

    5. Suppliers Commodity prices affect the supply costs. When commodity prices increase, cost for the restaurant increases as well. Most restaurants have commercial suppliers or their own supply warehouses.

    6. Suppliers Easy to switch suppliers as there are many to choose from. Supplier has limited bargaining power The majority of the suppliers business comes from the restaurant industry

    7. Substitute Products Other restaurants Eating at home As the recession continues, rather than forgoing dining out completely, people are trading down the restaurant category to fast-food and quick service industry

    8. Intensity of Competitive Rivalry Highly competitive As consumers become more health conscious, companies are competing to have more variety in menu choices Convenience is important

    9. Ratios and Chart Industry Expansion Rates Top 500 chain companies averaged 2.4% unit growth Sales growth was between 5.1% and 5.6% Guest traffic expected to increase 1% as people trade down from full-service

    10. Industry Summary Highly competitive Some segments will see a decline in sales as other segments increase U.S. restaurant industry is a $330 billion industry Fastest growing segment is fast-food and quick service restaurants

    11. Sources Net Advantage Standard and Poor’s http://www.netadvantage.standardandpoors.com/docs/indsur///rst_0908/rst20908.htm#trends Graves, Tom and Esther Y. Kwon. Food & Nonalcoholic Beverages.

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