Restaurant Groups

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.

AVERAGE CHECK
The average amount of money spent per check at an industry establishment.

CHAIN RESTAURANTS
Restaurants owned and directly operated by a single company.

COMPARABLE STORE SALES
A retail measure used to assess the true performance of retail outlets by taking out the effect of new store openings and only examining the sales growth of existing stores.

FAST-CASUAL RESTAURANTS
Self-service restaurants offering higher quality offerings, sometimes prepared to order, at a higher price point than traditional quick-service restaurants.

FRANCHISED RESTAURANTS
Restaurants with concepts sold to the individual operator. Franchisees receive ordering, marketing, training and financial and management support from the franchiser.

Overall, the industry is characterized by massive part-time employment, a high establishment to operator ratio and heavy external competition. Sit-down restaurants distinguish themselves with table service, necessitating significant labor to match demand spikes. Unlike in many large industries, labor is often handled on the local level through chains permitting outside ownership of one or more restaurants. The franchise model employed by numerous operators then gives those franchisees the ability to respond to changing markets, while technology connects stores back to the benefits of a parent chain's digital ordering system, unified marketing and negotiation leverage. Finally, despite improvements in efficiency keeping menu prices low, cost-conscious consumers are increasingly eating from a buffet of food alternatives: from meal kit delivery to fast-casual chains, today's diners have many options to chew on.