2024 Quick Service Restaurant (QSR) Franchise Opportunities, Trends and Marketing Tips

Posted on June 21, 2024 in Blog

Like so many consumer habits, the pandemic didn’t spark a shift toward faster, contactless dining experiences, but it did add plenty of momentum. Quick service restaurant franchises provide consumers with competitively priced meal, dessert and coffee options that fit busy schedules and tightening budgets. They also provide entrepreneurs with lower market entry costs and operating expenses thanks to small footprints and low labor requirements.

Find out what makes QSR franchising so enticing and why the segment’s popularity is here to stay.

What Is a Quick Service Restaurant?

The QSR category has always featured blurred edges. Quick service restaurants include some of the major players in fast food based on some of the defining characteristics of the market segment.

Speed – Regardless of menu items or size, QSRs provide fast service featuring prepared foods that can be eaten on the move. Drive-thrus are a mainstay of QSRs, but even indoor ordering is quick.
Affordability – QSRs menus are more affordable than traditional restaurants, although inflationary pricing has seen fast food prices outpace the broader Consumer Price Index, with food away from home prices clocking in at 5.2% year over year in January 2024.
Convenience – Ordering and enjoying QSR options aren’t just fast. The entire experience is carefully choreographed to reduce friction for the consumer. Fast food companies have driven tech-centric innovations like touchless payments, in-app ordering and customer loyalty programs, and facial recognition software to make ordering and paying even faster – that’s still in the works.

Many of the marquee trends in QSR are focused entirely on convenience, which encourages repeat business and forms strong consumer habits.

Three QSR Examples to Whet Your Appetite

Aside from McDonald’s, Burger King, and Subway, there are several examples of QSRs focused on winning market share in specific categories. This hyper-focused approach enables franchises to stick to the basics with a small real estate footprint, low labor requirements, and exceptionally fast service. Note that some of the fastest-growing QSR categories have the smallest menus and storefronts.

QSR Desserts

Sweet is simple – and lucrative. While new players like The Milkshake Factory and Yogurtland reflect the upside of dessert-first franchising, the category isn’t new. Dairy Queen, Cinnabon and Baskin-Robbins have been stalwart dessert restaurants for decades and show no sign of losing ground.

QSR Coffee

While Starbucks is clearly the category heavyweight, the coffee segment is experiencing increased competition. Dunkin’ (of Donut fame) has leaned into beverages for nearly a decade, but regional players like Caribou Coffee, Biggby, Scooter’s, Dutch Bros, and 7 Brew are growing quickly.

QSR Sandwiches

Subway has over 41,000 franchise locations worldwide, more than McDonald’s and Starbucks – combined. Newer rivals like Jimmy John’s, Jersey Mike’s and cross-over competitors like Chipotle are eating Subway’s lunch, making the sandwich category one of the tightest markets in franchising.

The Top QSR Franchise Opportunities of 2024

Some of the fastest-growing franchises in the US and Canada are squarely in the QSR category. For owners and prospective QSR franchisees, initial investments and start-up costs make these franchises worth considering.

1. Starbucks

The biggest coffee chain in the world plans to open 17,000 additional opening stores globally by 2030. Much of that growth will be focused overseas, with a stated US net new store growth target of 4% per year. Prospective owners can expect a degree of accommodation as Starbucks makes it easier for individuals and QSR franchise groups to invest in multiple locations.

2. Tropical Smoothie Café

The smooth and light fare model is taking off, pioneered by Tropical Smoothie Café. The brand opened 176 locations in 2023 and signed 258 franchise agreements registered by the end of the year, a strong indication of its trajectory for the years ahead.

3. Del Taco

After its acquisition by Jack in the Box in 2022, Del Taco has set its sights on aggressive expansion in several states, including Texas. The company added 138 restaurant agreements in 2023, including 42 new locations in Florida.

4. Jersey Mike’s

There’s ambitious, and then there’s Jersey Mike’s. The brand aims to open 350 stores in 2024, with another 350 in 2025. The company has no plans to chase Subway in terms of total stores, and despite its eye-popping growth plans, the brand already operates 2,600 locations in the US.

5. Dutch Bros. Coffee

The Midwest-based coffee chain added 159 stores in 2023, a feat it plans on repeating in 2023. That would bring just over 1,000 stores online by the end of 2024, reinforcing the brand’s claims of being one of the fastest-growing franchise brands in the QSR coffee category.

Quick Service Restaurant Market Report: Trends, Headwinds, and Opportunities

The COVID-19 pandemic pushed many businesses to the brink, though franchised quick service restaurants were positioned for resilience. With app-based and drive-thru ordering and shrinking reliance on in-store dining pre-dating COVID, franchisees (largely) survived the pandemic despite seeing 50-60% less foot traffic.

The industry’s growth rate stabilized in 2023 and is forecast to grow at 5.1% CAGR through 2027. With lending rates expected to become favorable in the second half of 2024, the ambitious growth plans of several franchises appear within reach – but it won’t be easy.

Industry Headwinds

While many brands reported strong earnings in 2023, the next few years pose two serious challenges in terms of new store growth and same-store sales.

Labor shortages – US unemployment rates remain at or near historic lows, forcing QSR franchisees to compete with each other and the broader market for workers. With a renewed emphasis on work/life balance, the non-traditional schedules required by fast food locations make for a tough recruiting pitch despite increased starting wages and state-mandated minimums.
Interest rates – While Federal funds rate forecasts now call for a 4.6% rate in Q4 of 2024 and 3.9% in 2025, many businesses are playing catch-up. High borrowing costs slowed new store growth and multi-unit expansion in 2022 and 2023. Additional revenue may go toward servicing existing debt rather than expansion, especially as brands increasingly rely on automated ordering, energy-efficient ovens and other equipment.

Industry Opportunities

The most impactful opportunities directly address two of the industry’s largest challenges.

Automation and self-serve technology – QSR brands are already investing millions in self-service ordering kiosks that reduce labor requirements and accelerate order queuing. Self-serve kiosks are an extension of in-app ordering systems already used by many brands, allowing customers to order before they arrive.
Vertical integration – Scale matters, and franchises enjoy incredibly beneficial economies of scale compared to unaffiliated competitors. Even as lending conditions tighten, many corporations have acquired upstream suppliers to deliver savings to franchisees, preserving margins and reducing supply chain volatility.

Despite the obvious momentum of several franchises, a few QSR trends do not cement long-term growth. Leaders right now must rely on more than size to grow store count. Consumers make the market, which is why marketing strategies for quick service restaurants rely on a careful mix of national and local campaigns.

Quick Service Restaurant Marketing: Strategy 101

Established and growing franchises alike provide more than branded cups and special sauces. Franchise marketing responsibilities vary by company, but brand awareness is squarely on corporate’s shoulders.

1. Think National First

A rising tide lifts all boats. Across entire QSR categories, mobility is a central concept. For consumers on the go, defining local can be blurry. Travelers choose franchises based on positive experiences at home, and there’s a good reason many QSR companies have partnered with gas stations and destination shopping centers.

2. Local Is About Conversions

QSR franchisees are ideally positioned to focus on local listings and local social media pages and maintain an efficient presence in traditional media like newspapers and direct mail. Corporate is still responsible for putting owner-operators in a position to succeed with an accessible and robust brand guide and branded assets.

3. No Guessing Allowed

Data analysis is daunting, especially when managing cross-channel attribution from websites, proprietary apps, and a mix of local and national marketing efforts. Make sure all properties are accurately tagged and enterprise-level reporting is as detailed as possible. To make informed decisions, insightful reporting and data integrity matter, especially for younger brands racing to meet ambitious growth objectives.

Get in touch for a detailed marketing plan; quick service restaurants shouldn’t wait around to find a marketing vendor that can help in a hurry.

Digital Marketing for QSR Brands on the Move

Franchise marketing is our bread and butter. For more than 25 years, Oneupweb has helped an array of franchise organizations overcome growing pains and seize opportunities in food and beverage, SaaS, home services and more. Our fully integrated teams provide deep industry expertise and creative solutions to your marketing and business challenges. Add a dash of spice to your franchise marketing; see what makes Oneupweb different. Get in touch or call (231) 922-9977 today to get started!