JUNE 2017

Transcription

1 JUNE

2 TOP 100 Analysis The big shift: Consumers move away from casual dining As casual dining loses business, coffee chains and quick-service restaurants gather steam BY JONATHAN MAZE Consumers are rapidly changing the way they dine at restaurants, according to the latest edition of the Nation s Restaurant News Top 100, and that s making an already competitive industry even more challenging. Consumers are opting for speed and convenience when they dine out, spending more at Starbucks Coffee, Chick-fil-A and even convenience stores like Wawa. They re spending less at restaurant chains with wait staff, like Outback Steakhouse and Applebee s Neighborhood Grill & Bar. Our data support contentions that consumers are increasingly favoring limited-service brands, whether for convenience, price or perceptions of more interesting or healthful food offerings, said Alan J. Liddle, data and event content director for Nation s Restaurant News, and manager of our Top 100 ranking. A shifting restaurant landscape The shift should come as little surprise to industry observers, who have seen a steady erosion of sales at Casual-Dining and Family-Dining chains dating back a decade, while the industry grapples with a host of new competitors. The big shift in restaurant spending is also rewarding Limited-Service chains that have a reputation for quality, or those that have found unique ways to connect with their customers. Our ranking lists companies based on systemwide sales in their most recent fiscal year, compared with their preceding fiscal year. Systemwide sales include sales generated at both franchised and company-owned outlets. The 100 largest chains generated 257 billion in sales in the Latest Year, rising 3.6 percent from the Preceding Year. That growth rate has slowed from 5.8 percent the Preceding Year. But a further examination shows that many chains increased sales by adding restaurants and increasing prices, rather than by generating additional customers. The 100 largest chains operated 200,165 company-owned and franchised locations, growing 1.9 percent from the Preceding Year. Meanwhile, menu prices increased 2.3 percent in 2016, according to federal data. Combined, those numbers suggest that the largest chains saw a total decline in traffic. The deceleration in sales growth strongly suggests improvement in unit-level performance also slowed for a significant number of Top 100 chains, Liddle said. Indeed, 2016 was one of the most difficult years for the industry in at least a decade, in terms of same-store sales growth, and particularly traffic growth. But the numbers suggest that privately held Our data support contentions that consumers are increasingly favoring limited-service brands,whether for convenience, price or perceptions of more interesting food offerings. Alan J. Liddle, NRN data and event content director chains, such as sandwich chains Jimmy John s and Arby s, have gained sales at the expense of their public competitors. The biggest problems came at Casual-Dining chains, where two of the four biggest chains, Applebee s and Chili s Grill & Bar, saw declines in system sales in the Latest Year. As a whole, Casual-Dining concepts accounted for 15.2 percent of the 257 billion in sales the 100 largest chains generated in the Latest Year, according to the Top 100. That marks a decline from 16.2 percent just two years ago. Similarly, Family-Dining concepts like IHOP and Denny s saw their share of the Top 100 decline as well, to 5.1 percent in

3 SIZING UP THE 2017 TOP 100 FASTEST-GROWING SEGMENTS + 4 Average systemwide sales growth of Top 100 Chains compared with 6.9 growth a year earlier Beverage- Snack Chicken LSR/Specialty Bakery-Cafe UNIT EXPANSION CONTINUES 200,165 UNITS UP FROM 196, Increase in total Top 100 unit count Average rate of unit growth for chains the Latest Year, from 5.3 percent the Preceding Year. Segments gaining share By comparison, Beverage-Snack chains like Starbucks Coffee and Dunkin Donuts gained share, and now represent 11.1 percent of the Top 100, rising from just under 10 percent two years earlier. And convenience stores, which are eagerly working to take business away from traditional restaurants, continued to gain market share. Although they represent just 2.7 percent of all chain sales in the Latest Year, that has increased in each of the past two years, and has risen from 2.5 percent two years ago. The list also demonstrates the growing popularity of chicken. Limited-Service/ Chicken chains now represent 8.5 percent of Top 100 sales, growing from 7.7 percent two years earlier. Much of the gain has come from Chickfil-A, the Atlanta-based chain that has roared up our ranking in recent years. Chick-fil-A was the biggest mover among the 10 largest restaurant chains in terms of total sales. The eighth largest chain in the U.S. somehow managed to increase system sales by nearly 17 percent in the Latest Year, to 7.9 billion, just behind No. 7 Dunkin Donuts, which had system sales of 8.2 billion. CONTINUED ON PAGE 12 LARGEST SEGMENTS BY SHARE OF TOTAL TOP 100 SALES LSR/BURGER CASUAL DINING BEVERAGE-SNACK CHICKEN PIZZA HOW IT ALL ADDS UP Total Sales Year-0ver-Year Change LATEST YEAR YEAR PRIOR YEAR 257B 248.1B 234.4B

4 TOP 100 Analysis SALES AND UNIT GROWTH BY SEGMENT SALES GROWTH BEVERAGESNACK CHICKEN OTHER* BAKERYCAFE C-STORE PIZZA LSR/ SANDWICH LSR/ BURGER LSR/ MEXICAN CASUAL DINING UNIT GROWTH FAMILY DINING *OTHER: IN-STORE AND LSR/SPECIALTY (INCLUDES BARBECUE, CHINESE, NOODLE AND SEAFOOD CHAINS) CONTINUED FROM PAGE 11 Traditional Limited-Service chains slow down While many Limited-Service chains generated sales growth, traditional quick-service burger chains represent a smaller piece of the Top 100 pie than in recent years. Limited-Service/Burger chains, led by giants McDonald s, Burger King and Wendy s, represented 30.5 percent of the Top 100. That represents a decline from 31.5 percent two years ago. Within that category, smaller chains with reputations for quality, notably fast-casual chain Five Guys and In-NOut Burger, gained share in recent years. McDonald s remains by far the largest domestic restaurant chain. McDonald s system sales were 36.4 billion in the Latest Year, rising 1.5 percent from the Preceding Year. McDonald s sales were more than twice that of the next largest chain, Starbucks, which generated 17.9 billion. Put another way: McDonald s is larger than Starbucks, Subway and Domino s combined. Still, Starbucks is not far from surpassing McDonald s on another front: Unit count. Starbucks had 13,172 locations JTp10-12_NRN_ _Intro spread MV.indd 12 TOP 100 NEWCOMERS Potbelly Sandwich Shop and Dickey s Barbecue Pit debuted on the Top 100 this year as No. 99 and No. 100, respectively. in the Latest Year, just 983 fewer than McDonald s, suggesting that the coffeehouse chain could overtake the burger giant based on unit count in two years. Unit count leader scales back The largest chain based on unit count is Subway, which operated 26,744 franchised locations in the Latest Year. That s a decline from 26,958 units the Preceding Year, and is the second straight year that the sandwich giant has seen its unit count fall, after decades of uninterrupted unit growth. Subway s decline in unit count, along with a 1-percent decline in Estimated Sales Per Unit, to 420,800, has hurt system sales, which were 11.3 billion in the Latest Year, falling from 11.5 billion the Preceding Year and 11.9 billion the Prior Year. Many Limited-Service chains generated sales growth in the Latest Year, but quick-service burger chains represented a smaller piece of the Top 100 pie than in previous years. On the other hand, the Latest Year proved to be particularly strong for the Mexican quick-service chain Taco Bell, which is now the fourth largest restaurant chain in the U.S., with 9.4 billion in system sales, growing 6 percent from the Preceding Year. The increase enabled Taco Bell to surpass two burger concepts: Burger King, at No. 5, and Wendy s, at No. 6. A pizza fight Rounding out the Top 10 were two pizza chains currently fighting for supremacy: Pizza Hut, at No. 9, saw system sales decline slightly, to 5.8 billion. Meanwhile, rapidly growing Domino s, at No. 10, increased system sales by 10.9 percent, to 5.3 billion. Domino s will likely surpass Pizza Hut as the nation s largest Pizza chain this year. The 11th largest chain on our ranking, Panera Bread, saw sales grow 7.4 percent, to 4.9 billion. Panera added kiosks to many locations and has bet big on a mobile app to improve service much like Domino s and Starbucks have worked to make it easier for consumers to order and pay from mobile phones. jonathan.maze@penton.com 6/13/17 9:40 AM

5 SHAPING THE FUTURE OF FOODSERVICE OCTOBER 1 3, 2017 HYATT REGENCY REUNION DALLAS, TX Presented by Nation s Restaurant News, MUFSO brings together the restaurant industry s top leaders, innovators, experts and change makers to reveal business insights that are laser focused on moving the restaurant industry forward. This summit for restaurant leaders features thought-provoking keynote speakers, interactive panel discussions, and highly engaging interviews with industry visionaries. The many unique networking opportunities that showcase the latest in culinary trends and new restaurant concepts also make MUFSO a can t miss event for restaurant leaders! Premier Sponsor: Partner Publications: Interested in exhibiting/sponsoring? Contact Janet.McLiverty@penton.com REGISTER MUFSO.COM

6 TOP 100 Chain Results U.S. SYSTEMWIDE SALES (Dollars in millions) LATEST PRIOR FISCAL PARENT COMPANY YEAR YEAR YEAR CONCEPT YEAR-END 1 1 McDonald s McDonald s Corp.* 36, , ,447.0 LSR/Burger Dec Starbucks Coffee Starbucks Corp.* 17, , ,962.0 Beverage-Snack Sept Subway Doctor s Associates Inc. 11, , ,900.0 LSR/Sandwich Dec Taco Bell Yum! Brands Inc.* 9, , ,188.9 LSR/Mexican Dec Burger King Restaurant Brands International Inc.* 9, , ,632.0 LSR/Burger Dec Wendy s The Wendy s Co.* 9, , ,568.0 LSR/Burger Dec Dunkin Donuts Dunkin Brands Group Inc.* 8, , ,175.5 Beverage-Snack Dec Chick-fil-A Chick-fil-A Inc. 7, , ,710.6 Chicken Dec Pizza Hut Yum! Brands Inc.* 5, , ,659.4 Pizza Dec Domino s Domino s Pizza Inc.* 5, , ,115.8 Pizza Dec Panera Bread Panera Bread Co.* 4, , ,260.0 Bakery-Cafe Dec Sonic Drive-In Sonic Corp.* 4, , ,032.8 LSR/Burger Aug KFC Yum! Brands Inc.* 4, , ,248.7 Chicken Dec Applebee s Neighborhood Grill & Bar DineEquity Inc.* 4, , ,577.4 Casual Dining Dec Olive Garden Darden Restaurants Inc.* 3, , ,772.0 Casual Dining May Chipotle Mexican Grill Chipotle Mexican Grill Inc.* 3, , ,065.6 LSR/Mexican Dec Buffalo Wild Wings Buffalo Wild Wings Inc.* 3, , ,238.2 Casual Dining Dec Arby s Roark Capital Group 3, , ,177.0 LSR/Sandwich Dec Little Caesars Pizza Little Caesar Enterprises Inc. 3, , ,405.0 Pizza Dec Dairy Queen Berkshire Hathaway Inc.* 3, , ,192.0 LSR/Burger Dec Jack in the Box Jack in the Box Inc.* 3, , ,179.7 LSR/Burger Sept Chili s Grill & Bar Brinker International Inc.* 3, , ,614.0 Casual Dining June IHOP DineEquity Inc.* 3, , ,933.0 Family Dining Dec Papa John s Pizza Papa John s International Inc.* 2, , ,685.0 Pizza Dec Cracker Barrel Old Country Store Cracker Barrel Old Country Store Inc.* 2, , ,683.7 Family Dining July Panda Express Panda Restaurant Group Inc. 2, , ,246.4 LSR/Chinese Dec Popeyes Louisiana Kitchen Restaurant Brands International Inc.* 2, , ,419.0 Chicken Dec Denny s Denny s Corp.* 2, , ,539.0 Family Dining Dec Outback Steakhouse Bloomin Brands Inc.* 2, , ,487.0 Casual Dining Dec Eleven Seven & i Holdings Co. Ltd. 2, , ,327.0 C-Store Dec Red Lobster Golden Gate Capital 2, , ,373.0 Casual Dining May Texas Roadhouse Texas Roadhouse Inc.* 2, , ,876.6 Casual Dining Dec Hardee s Roark Capital Group 2, , ,083.0 LSR/Burger Jan Whataburger Whataburger Inc. 2, , ,801.1 LSR/Burger Dec Jimmy John s Gourmet Sandwiches Roark Capital Group (Jimmy John s LLC) 2, , ,756.7 LSR/Sandwich Dec The Cheesecake Factory The Cheesecake Factory Inc.* 2, , ,782.4 Casual Dining Dec Wawa Wawa Inc. 1, , ,408.1 C-Store Dec Golden Corral Investors Management Corp. 1, , ,734.5 Family Dining/Buffet Dec Zaxby s Zaxby s Franchising Inc. 1, , ,257.5 Chicken Dec LongHorn Steakhouse Darden Restaurants Inc.* 1, , ,553.0 Casual Dining May Carl s Jr. Roark Capital Group 1, , ,487.6 LSR/Burger Jan Red Robin Gourmet Burgers and Brews Red Robin Gourmet Burgers Inc.* 1, , ,438.3 Casual Dining Dec Five Guys Burgers and Fries Five Guys Holdings Inc. 1, , ,208.3 LSR/Burger Dec TGI Fridays Sentinel Capital Partners 1, , ,763.0 Casual Dining Dec Culver s Culver Franchising System Inc. 1, , ,035.7 LSR/Burger Dec Waffle House Waffle House Inc. 1, , ,118.6 Family Dining May Bojangles Famous Chicken n Biscuits Advent International Corp. 1, , ,033.2 Chicken Dec Steak n Shake Biglari Holdings Inc.* 1, , LSR/Burger Dec BJ s Restaurant & Brewhouse BJ s Restaurants Inc.* Casual Dining Dec Dave & Buster s Dave & Buster s Entertainment Inc.* Casual Dining Jan. 17 * PUBLICLY HELD U.S. COMPANY

7 TOP 100 Chain Results U.S. SYSTEMWIDE SALES (Dollars in millions) LATEST PRIOR FISCAL PARENT COMPANY YEAR YEAR YEAR CONCEPT YEAR-END Ruby Tuesday Ruby Tuesday Inc.* , ,179.4 Casual Dining May Casey s General Store Casey s General Stores Inc.* C-Store April Wingstop Wingstop Inc.* Chicken Dec Circle K Alimentation Couche-Tard Inc C-Store April P.F. Chang s China Bistro Centerbridge Partners L.P Casual Dining Dec Chuck E. Cheese s Apollo Global Management LLC* Pizza Dec Papa Murphy s Take N Bake Pizza Papa Murphy s Holdings Inc.* Pizza Dec Bob Evans Restaurants Golden Gate Capital Family Dining April In-N-Out Burger In-N-Out Burger Inc LSR/Burger Dec Jersey Mike s Subs Jersey Mike s Franchise Systems Inc LSR/Sandwich Dec Hooters H.I.G. Capital LLC (HOA Holdings LLC) Casual Dining Dec Qdoba Mexican Eats Jack in the Box Inc.* LSR/Mexican Sept Church s Chicken Friedman Fleischer & Lowe LLC Chicken Dec El Pollo Loco El Pollo Loco Holdings Inc.* Chicken Dec Costco Costco Wholesale Corp.* In-Store Aug Tim Hortons Restaurant Brands International Inc.* Bakery-Cafe Dec Krispy Kreme Doughnuts JAB Holding Co Beverage-Snack Jan Del Taco Del Taco Restaurants Inc.* LSR/Mexican Dec Cheddar s Scratch Kitchen Darden Restaurants Inc.* Casual Dining Dec Sheetz Sheetz Inc C-Store Sept Carrabba s Italian Grill Bloomin Brands Inc.* Casual Dining Dec Moe s Southwest Grill Roark Capital Group LSR/Mexican Dec Firehouse Subs Firehouse of America LLC LSR/Sandwich Dec California Pizza Kitchen Golden Gate Capital Casual Dining Dec Jason s Deli Deli Management Inc LSR/Sandwich Dec Ruth s Chris Steak House Ruth s Hospitality Group Inc.* Casual Dining Dec Raising Cane s Chicken Fingers Raising Cane s Restaurants LLC Chicken Dec Perkins Restaurant & Bakery Wayzata Investment Partners LLC Family Dining Dec Bonefish Grill Bloomin Brands Inc.* Casual Dining Dec Logan s Roadhouse Kelso & Co Casual Dining July Boston Market Sun Capital Partners Inc Chicken Dec Baskin-Robbins Dunkin Brands Group Inc.* Beverage-Snack Dec McAlister s Deli Roark Capital Group LSR/Sandwich Dec White Castle White Castle System Inc LSR/Burger Dec Noodles & Company Noodles & Company* LSR/Noodle Dec Jamba Juice Jamba Inc.* Beverage-Snack Dec Auntie Anne s Roark Capital Group Beverage-Snack Dec Checkers Oak Hill Capital Partners LSR/Burger Dec Einstein Bros. Bagels JAB Holding Co Bakery-Cafe Dec Captain D s Seafood Kitchen Centre Partners Management LLC LSR/Seafood Dec Yard House Darden Restaurants Inc.* Casual Dining May Target Cafe (Target stores) Target Corp.* In-Store Jan Long John Silver s LJS Partners LLC LSR/Seafood Dec O Charley s Fidelity National Financial Inc.* Casual Dining Dec Marco s Pizza Marco s Franchising LLC Pizza Dec Cicis CiCi Enterprises L.P Pizza Dec Round Table Pizza Round Table Franchise Corp Pizza Dec Krystal Argonne Capital Group LLC LSR/Burger Dec Potbelly Sandwich Shop Potbelly Corp.* LSR/Sandwich Dec Dickey s Barbecue Pit Dickey s Barbecue Restaurants Inc LSR/Barbecue May 17 * PUBLICLY HELD U.S. COMPANY SOURCE: NRN RESEARCH

8 TOP 100 Chain Results Top 10 fastestgrowing chains Standout restaurants in the Top 100 are spread across multiple segments, but chicken ruled the roost among the 10 fastest-growing chains, in terms of U.S. systemwide sales. Four Chicken chains Raising Cane s Chicken Fingers, Wingstop, Chick-fil-A and Zaxby s flexed the most segment muscle among the Top 10 gainers. Those four Chicken chains eclipsed brands in the Top 10 from other segments, including two pizza players Marco s Pizza and Domino s as well as one each in Casual Dining (Dave & Buster s), Limited Service/Sandwich (Jersey Mike s Subs), Beverage-Snack (Starbucks Coffee) and Limited Service/Specialty (Panda Express). While the Top 10 traditionally features chains that booked a larger percentage of growth on a smaller base, the 2017 class included several big players, like Starbucks, with 13,172 U.S. locations, and Domino s, with 5,371 domestic units. Starbucks grew to 17.9 billion in U.S. systemwide sales in the Latest Year, from 16 billion the Preceding Year. Domino s rose to 5.3 billion in the Latest Year, from 4.8 billion the Preceding Year. Newcomers to the Top 10 included No. 7 Panda Express, which was No. 14 in the Preceding Year, and No. 9 Starbucks, up from No. 13. They replaced Firehouse Subs and Wawa. Take a closer look at the 10 fastest-growing restaurant chains. Ron Ruggless 2 Jersey Mike s Subs Limited Service/Sandwich Slipping to No. 2 from its top spot the past three years, Manasquan, N.J.-based Jersey Mike s Subs maintained sales strength and increased U.S. systemwide sales by 22.2 percent in the Latest Year. Founded in 1956, the sandwich brand passed 1,000 units in October 2015, expanding the footprint for its subs topped with a signature juice of red wine vinegar and olive oil. The sandwich chain ranked fourth in unit growth in the Latest Year, recording a 13.5-percent increase in U.S. restaurants, to 1,187 units. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU M 1,187 [ +13.5] 738,900 [ +4.2] 1 3 Marco s Pizza Pizza Toledo, Ohio-based Marco s Pizza made a second appearance in the Latest Year, at No. 3 in the fastest-growing chains, after debuting at No. 2 the Preceding Year. The first Marco s restaurant opened in 1978, and the chain has expanded to more than 30 states, as well as internationally. U.S. systemwide sales growth of 17.1 percent in the Latest Year was fueled by 15.4-percent growth in domestic units, putting the brand at No. 3 in terms of unit growth. SALES GROWTH 17.1 SALES 95 TOTAL SALES Raising Cane s Chicken Fingers Chicken Perched at the top of the fastest-growing chains, Plano, Texas-based Raising Cane s Chicken Fingers saw estimated sales increase on robust 23.5-percent growth in unit count. That was the largest percentage of unit growth in the Top 100. The Louisiana-born brand, which rose from fourth place among sales growth chains in the Preceding Year, proved once again that a simple menu punctuated with Cane s Sauce and Texas toast could continue to fuel sales, which grew 25.9 percent in the Latest Year. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU M 310 [ +23.5] 2.3 M [ +3.7] PHOTOS COURTESY OF THE INDIVIDUAL RESTAURANT COMPANIES EXCEPT WHERE NOTED M TOTAL UNITS 770 [ +15.4] ESPU 680,400 [ +1.4]

9 TOP 100 Chain Results How the Up and Coming Stack Up SALES GROWTH ( change, Latest Year vs. Preceding Year) RAISING CANE S CHICKEN FINGERS 25.9 JERSEY MIKE S SUBS 22.2 MARCO S PIZZA 17.1 WINGSTOP 16.9 CHICK-FIL-A 16.9 DAVE & BUSTER S 15.8 PANDA EXPRESS 13.8 ZAXBY S 13.3 STARBUCKS COFFEE 12.4 DOMINO S Wingstop Chicken A focused menu and a variety of flavors helped Dallas-based Wingstop spread its wings into new locations in the Latest Year. The chain added 136 U.S. restaurants, for a 17.3-percent unit-count increase over the Preceding Year. The chain ranked second among Top 100 brands in U.S. unit growth behind fellow Chicken chain Raising Cane s. Along with tech innovations like automated ordering on social platforms and voice orders via Amazon Alexa, Wingstop increased sales 16.9 percent in the Latest Year. SALES GROWTH 16.9 SALES 53 TOTAL SALES M TOTAL UNITS 922 [ +17.3] ESPU 1.1 M [ 0.3] TOM PENNINGTON/GETTY IMAGES UNIT GROWTH & ESPU GROWTH ( change, Latest Year vs. Preceding Year) RAISING CANE S CHICKEN FINGERS WINGSTOP 5 MARCO S PIZZA JERSEY MIKE S SUBS DAVE & BUSTER S ZAXBY S CHICK-FIL-A PANDA EXPRESS STARBUCKS COFFEE DOMINO S Chick-fil-A Chicken Atlanta-based Chick-fil-A, a legacy chain, still grew sales 16.9 percent in the Latest Year. Menu changes, like replacing coleslaw with a Superfood Salad of broccolini and kale helped the chain increase Estimated Sales Per Unit about 10.7 percent, to an average 3.9 million. Chick-fil-A also expanded into new markets and increased unit count 6 percent, passing the 2,000-unit mark in the Latest Year. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU B 2,085 [ +6] 3.9 M [ +10.7] 23.5 GROWTH IN UNITS GROWTH IN ESPU 6 Dave & Buster s Casual Dining With Estimated Sales Per Unit of 11.7 million the highest in the Top 100 Dallas-based Dave & Buster s continued to hit the jackpot with its big-box entertainment and dining destinations. The chain pushed a New Is What We Do theme by introducing new arcade versions of Nintendo games and movies like Ghostbusters, as well as new food offerings. At mid-year, the company said 35 percent of menu items sold had debuted in the past four years. Unit growth also drove a sales increase of 15.8 percent in the Latest Year. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU M 90 [ +12.5] 11.7 M [ +3.6] MARK DAVIS/GETTY IMAGES FOR DAVE & BUSTER S

10 TOP 100 Chain Results 7 Panda Express LSR/Chinese Rosemead, Calif.-based Panda Express booked sales growth of 13.8 percent in the Latest Year. The chain increased U.S. unit count by 5.8 percent and added 8.1 percent to its Estimated Sales Per Unit of 1.6 million. The brand touted its Specialty positioning in Limited Service by highlighting classic dishes such as General Tso s chicken in a marketing campaign and flirting with hybrid utensils like the fork-chopstick chork. The positioning moved the brand up from No. 14 in sales growth in the Preceding Year. SALES GROWTH 13.8 SALES 26 TOTAL SALES 2.9 B TOTAL UNITS 1,893 [ +5.8] ESPU 1.6 M [ +8.1] 8 Zaxby s Chicken Athens, Ga.-based Zaxby s punctuated its menu of chicken tenders, wings and sandwiches with features like the return of the Zensation Salad, a limited-time offer highlighting Asian and Southern flavors. Zaxby s rose to No. 8 among Top 10 growth chains, from No. 10 the Preceding Year, booking an estimated sales increase of 13.3 percent in the Latest Year. The chain expanded its regional footprint with 10.6-percent unit growth, ending the Latest Year with 803 units in 16 Southern and Midwestern states. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU B 803 [ +10.6] 2.2 M [ +2.5] 9 Starbucks Coffee Beverage-Snack Even the biggest players can display nimble growth. Leaning in heavily on technology and smartphone ordering, Seattle-based Starbucks Coffee increased U.S. systemwide sales 12.4 percent in the Latest Year. The coffee behemoth moved up from the No. 13 fastest-growing chain in the Preceding Year by growing unit count 5.2 percent, to 13,172 U.S. units, and boosting Estimated Sales Per Unit to 1.4 million. Starbucks strategy entailed filling in dayparts like breakfast and afternoon coffee with a menu that also catered to snack occasions. SALES GROWTH SALES TOTAL SALES TOTAL UNITS ESPU B 13,172 [ +5.2] 1.4 M [ +7] TOM DULAT/GETTY IMAGES 10 Domino s Pizza Domino s continued to grow sales in the Latest Year, booking a 10.9-percent increase. J. Patrick Doyle, CEO of the Ann Arbor, Mich.-based chain, called sales remarkable in a fourth-quarter earnings call, and said he was starting to run out of adjectives to describe Domino s performance. Technology, remodeling and marketing made the chain a powerhouse, but tech is at the forefront. At the end of 2016, 60 percent of Domino s orders came through digital channels. A loyalty program also contributed significantly to sales growth, with Estimated Sales Per Unit rising 7.7 percent in the Latest Year, to 1 million. SALES GROWTH 10.9 SALES 10 TOTAL SALES 5.3 B TOTAL UNITS 5,371 [ +3.3] ESPU 1 M [ +7.7]

11 TOP 100 Chain Results GROWTH IN U.S. SYSTEMWIDE SALES 1 4 Raising Cane s Chicken Fingers Jersey Mike s Subs Marco s Pizza Wingstop Chick-fil-A Dave & Buster s Panda Express Zaxby s Starbucks Coffee Domino s Dickey s Barbecue Pit Wawa Potbelly Sandwich Shop Whataburger Casey s General Store Culver s The Cheesecake Factory Jimmy John s Gourmet Sandwiches Qdoba Mexican Eats Checkers Tim Hortons Sheetz BJ s Restaurant & Brewhouse McAlister s Deli Dunkin Donuts Noodles & Company Texas Roadhouse Costco Circle K Moe s Southwest Grill Krispy Kreme Doughnuts Panera Bread Popeyes Louisiana Kitchen Bojangles Famous Chicken n Biscuits Del Taco Arby s Taco Bell El Pollo Loco Firehouse Subs Auntie Anne s Yard House Five Guys Burgers and Fries Round Table Pizza In-N-Out Burger Ruth s Chris Steak House Papa John s Pizza Jamba Juice KFC Hardee s Jack in the Box SOURCE: NRN RESEARCH GROWTH IN U.S. SYSTEMWIDE SALES Sonic Drive-In Krystal Buffalo Wild Wings White Castle Little Caesars Pizza Dairy Queen Cracker Barrel Old Country Store Cheddar s Scratch Kitchen Captain D s Seafood Kitchen Steak n Shake Cicis Olive Garden LongHorn Steakhouse Einstein Bros. Bagels Burger King Baskin-Robbins Eleven Waffle House Denny s Carl s Jr McDonald s Red Lobster Red Robin Gourmet Burgers and Brews Wendy s Papa Murphy s Take N Bake Pizza California Pizza Kitchen Jason s Deli Chuck E. Cheese s Hooters Target Cafe (Target stores) IHOP Bonefish Grill Pizza Hut P.F. Chang s China Bistro Subway Long John Silver s Outback Steakhouse Perkins Restaurant & Bakery Golden Corral Carrabba s Italian Grill Chili s Grill & Bar Boston Market O Charley s Church s Chicken Applebee s Neighborhood Grill & Bar Bob Evans Restaurants Logan s Roadhouse TGI Fridays Chipotle Mexican Grill Ruby Tuesday AVERAGES:

12 TOP 100 Chain Results Five Takeaways Raising Cane s Chicken Fingers raises eyebrows in systemwide sales growth while Casual Dining takes a hit with several chains scraping the bottom 1. RAISING CANE S IS ON FIRE Raising Cane s Chicken Fingers climbed to No. 1 in sales growth in the Latest Year, showing a nearly 26-percent increase to million. In the Preceding Year, Raising Cane s stood at No. 4 with more than 508 million in sales. That growth can be attributed to increases in both unit count and Estimated Sales Per Unit, or ESPU. Raising Cane s also topped the chain unit growth chart in the latest year, adding 59 units for a nearly 24-percent increase to 310 units. The Baton Rouge, La.-based chain s ESPU increased nearly 4 percent to 2.3 million, which is impressive considering the limited-but-focused menu of batter-fried chicken tenders, crinkle-cut fries, coleslaw, Texas toast and various sauces. 2. JERSEY MIKE S TAKES NO. 2 SPOT Raising Cane s bumped Jersey Mike s Subs to No. 2, though the sandwich chain grew sales by more than 22 percent to 825 million, in part because of a 13-percent increase in unit count to 1,187 and a more than 4 percent increase in ESPU to nearly 739,000. Given the presence of so many poultry specialists among the top five sales growth leaders, it should come as no surprise that Jersey Mike s top-selling sandwich in 2016 was the No. 7, which is turkey breast and provolone. 3. MARCO S ON THE MOVE Toledo, Ohio-based Marco s Pizza also bumped down a box to third place with a 17-percent increase in sales to nearly 489 million. Marco s added 103 units, a more than 15-percent increase to 770, making it the third-fastestgrowing chain in unit base in the Latest Year. The company s goal is to reach 1,000 units open by the end of Present in more than 30 states across the U.S., Marco s Pizza still has room to grow. And, despite that unit growth, Marco s has continued to grow its ESPU, which were up 1 percent in the Latest Year. 4. TOP 5 LEADERBOARD In a virtual tie were Wingstop (943 million in sales) and Chick-fil-A (7.9 billion in sales), both of which remained in the top five as sales growth leaders, each with nearly 17 percent growth in sales. Wingstop added 136 locations for a total of 922 in the Latest Year, a 17-percent increase. Chick-fil-A, meanwhile, added 118 locations, a 6-percent increase, for a total of 2,085. Despite Chick-fil-A s increasingly massive size, the Atlanta-based chain was one of the few to see a double-digit increase in ESPU, which was up nearly 11 percent in the Latest Year to 3.9 million. 5. BAR-AND-GRILL SLUMPS Notable at the bottom of the sales-growth chart is a cluster of legacy Casual-Dining brands in the bar-and-grill segment. Removing outlier fast-casual Chipotle Mexican Grill, which can blame its nearly 14-percent decline in sales on the foodborne illness crisis of late 2015, four of the bottom five are all Casual-Dining chains that have struggled to maintain relevance. Ruby Tuesday s nearly 16-percent decline in sales is largely a result of the closure of 114 locations since the Preceding Year. This year, the company is exploring strategic alternatives, including a potential sale. In the negative sales camp are also Chili s Grill & Bar, Applebee s Neighborhood Grill & Bar, O Charley s, Bob Evans Restaurants, Logan s Roadhouse and TGI Fridays. Jonathan Maze

13 TOP 100 Chain Results TOTAL NUMBER OF U.S. UNITS LATEST PRIOR FISCAL TOTAL COMPANY FRANCHISED TOTAL COMPANY FRANCHISED TOTAL COMPANY FRANCHISED YEAR-END 1 1 Subway 26, ,744 26, ,958 27, ,103 Dec McDonald s 14,155 1,109 13,046 14,259 1,360 12,899 14,350 1,514 12,836 Dec Starbucks Coffee 13,172 7,880 5,292 12,521 7,559 4,962 11,939 7,280 4,659 Sept Dunkin Donuts 8, ,828 8, ,392 8, ,047 Dec Eleven 7, ,008 7,825 1,073 6,752 7,803 1,413 6,390 Dec Pizza Hut 7, ,371 7, ,311 7, ,405 Dec Burger King 7, ,105 7, ,076 7, ,070 Dec Taco Bell 6, ,399 6, ,227 5, ,025 Dec Wendy s 5, ,409 5, ,090 5, ,895 Dec Domino s 5, ,979 5, ,816 5, ,690 Dec Dairy Queen 4, ,463 4, ,447 4, ,444 Dec Little Caesars Pizza 4, ,780 4, ,729 4, ,528 Dec Circle K 4,240 3, ,842 3, ,777 3, April KFC 4, ,966 4, ,064 4, ,185 Dec Sonic Drive-In 3, ,212 3, ,139 3, ,127 Aug Papa John s Pizza 3, ,629 3, ,583 3, ,564 Dec Arby s 3,237 1,044 2,193 3,214 1,004 2,210 3, ,286 Dec Jimmy John s Gourmet Sandwiches 2, ,584 2, ,354 2, ,071 Dec Baskin-Robbins 2, ,517 2, ,493 2, ,478 Dec Jack in the Box 2, ,837 2, ,835 2, ,818 Sept Chipotle Mexican Grill 2,198 2, ,971 1, ,755 1,755 0 Dec Chick-fil-A 2, ,085 1, ,967 1, ,871 Dec Popeyes Louisiana Kitchen 2, ,012 1, ,900 1, ,805 Dec Casey s General Store 1,979 1, ,931 1, ,880 1,880 0 April Panera Bread 1, ,099 1, ,045 1, Dec Waffle House 1,905 1, ,891 1, ,840 1, May Panda Express 1,893 1, ,790 1, ,708 1, Dec Applebee s Neighborhood Grill & Bar 1, ,858 1, ,878 1, ,847 Dec Hardee s 1, ,733 1, ,687 1, ,363 Jan Target Cafe (Target stores) 1,802 1, ,789 1, ,774 1,774 0 Jan IHOP 1, ,627 1, ,593 1, ,568 Dec Denny s 1, ,441 1, ,435 1, ,435 Dec Papa Murphy s Take N Bake Pizza 1, ,369 1, ,369 1, ,342 Dec Auntie Anne s 1, ,280 1, ,231 1, ,172 Dec Five Guys Burgers and Fries 1, , , Dec Chili s Grill & Bar 1, , , June Buffalo Wild Wings 1, , , Dec Jersey Mike s Subs 1, ,134 1, , Dec Carl s Jr. 1, ,041 1, , Jan Church s Chicken 1, , , Dec Firehouse Subs 1, , Dec Wingstop Dec Olive Garden May Jamba Juice Dec Whataburger Dec Zaxby s Dec Tim Hortons Dec Marco s Pizza Dec Outback Steakhouse Dec Wawa Dec. 16 NOTE: TO BE CONSISTENT WITH EARLIER PRESENTATIONS OF U.S. UNITS, LONG JOHN SILVER S FIGURES EXCLUDE SOME MULTIBRAND LOCATIONS. NOTE: COMPANY OR FRANCHISED TOTALS MAY INCLUDE JOINT-VENTURE OR FRANCHISOR-MANAGED UNITS; FRANCHISED TOTALS INCLUDE LICENSED UNITS. SOURCE: NRN RESEARCH

14 TOP 100 Chain Results TOTAL NUMBER OF U.S. UNITS LATEST PRIOR FISCAL TOTAL COMPANY FRANCHISED TOTAL COMPANY FRANCHISED TOTAL COMPANY FRANCHISED YEAR-END Einstein Bros. Bagels Dec Bojangles Famous Chicken n Biscuits Dec Long John Silver s Dec Qdoba Mexican Eats Sept Moe s Southwest Grill Dec Red Lobster May Cracker Barrel Old Country Store July Culver s Dec Dickey s Barbecue Pit May Steak n Shake Dec Ruby Tuesday May Checkers Dec Del Taco Dec Chuck E. Cheese s Dec Red Robin Gourmet Burgers and Brews Dec Sheetz Sept Noodles & Company Dec Bob Evans Restaurants April Captain D s Seafood Kitchen Dec LongHorn Steakhouse May Costco Aug Texas Roadhouse Dec Golden Corral Dec TGI Fridays Dec Boston Market Dec El Pollo Loco Dec Potbelly Sandwich Shop Dec Round Table Pizza Dec Cicis Dec McAlister s Deli Dec White Castle Dec Perkins Restaurant & Bakery Dec Krystal Dec Hooters Dec In-N-Out Burger Dec Krispy Kreme Doughnuts Jan Raising Cane s Chicken Fingers Dec Jason s Deli Dec Logan s Roadhouse July Carrabba s Italian Grill Dec P.F. Chang s China Bistro Dec O Charley s Dec Bonefish Grill Dec California Pizza Kitchen Dec The Cheesecake Factory Dec BJ s Restaurant & Brewhouse Dec Cheddar s Scratch Kitchen Dec Ruth s Chris Steak House Dec Dave & Buster s Jan Yard House May 17 TOTALS: 200,165 48, , ,389 47, , ,168 47, ,298

15 TOP 100 Chain Results GROWTH IN TOTAL NUMBER OF U.S. UNITS NET CHANGE 1 2 Raising Cane s Chicken Fingers Wingstop Marco s Pizza Jersey Mike s Subs Dave & Buster s Chipotle Mexican Grill Potbelly Sandwich Shop Zaxby s Circle K Jimmy John s Gourmet Sandwiches Firehouse Subs Dickey s Barbecue Pit BJ s Restaurant & Brewhouse Culver s Bojangles Famous Chicken n Biscuits Noodles & Company McAlister s Deli Moe s Southwest Grill El Pollo Loco Chick-fil-A Sheetz Panda Express Five Guys Burgers and Fries Qdoba Mexican Eats Starbucks Coffee Panera Bread Krispy Kreme Doughnuts Popeyes Louisiana Kitchen Texas Roadhouse Dunkin Donuts Buffalo Wild Wings Costco Auntie Anne s Tim Hortons The Cheesecake Factory Wawa Domino s In-N-Out Burger Steak n Shake Yard House Papa Murphy s Take N Bake Pizza Checkers Jamba Juice Taco Bell Red Robin Gourmet Burgers and Brews Casey s General Store Hardee s IHOP Krystal Whataburger SOURCE: NRN RESEARCH GROWTH IN TOTAL NUMBER OF U.S. UNITS NET CHANGE LongHorn Steakhouse Ruth s Chris Steak House Jason s Deli Little Caesars Pizza Del Taco Papa John s Pizza Cheddar s Scratch Kitchen Captain D s Seafood Kitchen Eleven Sonic Drive-In Carl s Jr Waffle House Target Cafe (Target stores) Arby s Denny s Baskin-Robbins O Charley s Boston Market Burger King Dairy Queen Olive Garden Cracker Barrel Old Country Store Hooters Wendy s Jack in the Box Outback Steakhouse Logan s Roadhouse P.F. Chang s China Bistro Red Lobster Chuck E. Cheese s Golden Corral McDonald s Bob Evans Restaurants Subway Chili s Grill & Bar Round Table Pizza Applebee s Neighborhood Grill & Bar Carrabba s Italian Grill Einstein Bros. Bagels California Pizza Kitchen White Castle Pizza Hut Bonefish Grill KFC Perkins Restaurant & Bakery TGI Fridays Cicis Church s Chicken Long John Silver s Ruby Tuesday AVERAGES:

16 TOP 100 Chain Results Five Takeaways In unit counts, McDonald s and Subway lose ground while Starbucks branches out. Chicken and Fast Casual are hot. Casual Dining is not. 1. SHRINKING GIANTS The two largest restaurant chains, in terms of unit count, are not quite as large as they were a year ago. Both McDonald s and Subway shrank in their latest fiscal years. McDonald s declined by 104 locations, but remains the second biggest chain at 14,155 locations. And Subway remains the largest, at 26,744 locations despite a 214-unit decline in the Latest Year. 2. GROWING GIANTS Starbucks Corp. added the most locations 651 in the Latest Year, representing unit growth of just over 5 percent. It had 13,172 year-end locations. Next on the list? The convenience store chain Circle K, which added 398 locations, or just more than 10 percent, to bring the chain to 4,240 units. Dunkin Donuts, meanwhile, added another 397 locations and now operates 8,828 franchised units. 3. CHICKEN RULES THE ROOST It s good to be a Chicken chain right now. The fastest growing chain, in terms of unit count, was Raising Cane s Chicken Fingers, which enjoyed 23.5 percent unit count growth in the Latest Year after adding 59 locations, giving it 310. It was the second fastest growing chain the year before. No. 2 Wingstop, which added 136 locations, or 17.3 percent., to 922 units. No. 8, meanwhile, was Zaxby s, which added 77 locations, or 10.6 percent, to FAST CASUAL IS BOOMING Fast-Casual chains continued to add locations at a breakneck pace in the Latest Year. Twelve of the 20 fastest growing brands on our ranking are Fast- Casual chains, including seven of the top 10. In addition to the aforementioned Chicken concepts, Jersey Mike s, Chipotle Mexican Grill, Potbelly Sandwich Shop and Jimmy John s Gourmet Sandwiches are all among the 10 fastest growing chains in terms of unit count. 5. BUT CASUAL DINING IS NOT On the other hand, only one of the 10 fastest growing chains is a Casual- Dining concept. Dave & Buster s is the fifth fastest growing chain after adding 10 locations. And only three Casual-Dining companies are among the 30 fastest growing. Meanwhile, seven of the 21 companies that saw unit count declines were Casual-Dining chains, including Ruby Tuesday, which shrank the most, at nearly 17 percent, declining by 114 locations, to 564. Jonathan Maze

17 TOP 100 Chain Results GROWTH IN U.S. FRANCHISE UNITS NET CHANGE 1 3 Boston Market P.F. Chang s China Bistro Raising Cane s Chicken Fingers Potbelly Sandwich Shop Bonefish Grill Wingstop Marco s Pizza O Charley s Jersey Mike s Subs Steak n Shake Panda Express McAlister s Deli Zaxby s Firehouse Subs Jimmy John s Gourmet Sandwiches Dickey s Barbecue Pit Checkers Culver s Noodles & Company Bojangles Famous Chicken n Biscuits Moe s Southwest Grill Starbucks Coffee Wendy s Chick-fil-A Popeyes Louisiana Kitchen Carl s Jr Krispy Kreme Doughnuts Dunkin Donuts Panera Bread El Pollo Loco Golden Corral Auntie Anne s Tim Hortons Eleven Buffalo Wild Wings Domino s Taco Bell Five Guys Burgers and Fries Jamba Juice Hardee s Whataburger Sonic Drive-In NOTE: THE 16 TOP 100 CHAINS NOT REPRESENTED ON THIS TABLE DO NOT FRANCHISE. SOURCE: NRN RESEARCH GROWTH IN U.S. FRANCHISE UNITS NET CHANGE IHOP Jason s Deli Papa John s Pizza Ruth s Chris Steak House Texas Roadhouse Little Caesars Pizza McDonald s Baskin-Robbins Waffle House Pizza Hut Denny s Burger King Dairy Queen Jack in the Box Cheddar s Scratch Kitchen Chuck E. Cheese s Hooters Logan s Roadhouse LongHorn Steakhouse Outback Steakhouse Papa Murphy s Take N Bake Pizza Circle K Arby s Subway Applebee s Neighborhood Grill & Bar Round Table Pizza TGI Fridays Qdoba Mexican Eats KFC Del Taco Chili s Grill & Bar Krystal Perkins Restaurant & Bakery Einstein Bros. Bagels Captain D s Seafood Kitchen Church s Chicken Cicis Long John Silver s Red Robin Gourmet Burgers and Brews California Pizza Kitchen Ruby Tuesday Carrabba s Italian Grill AVERAGES:

18 TOP 100 Unit-Level Trends Dave & Buster s plays its way to the top Chain uses entertainment to generate industry-leading volumes BY JONATHAN MAZE ESPU BY THE NUMBERS ESTIMATED SALES PER UNIT LARGEST 11.7 MILLION AVERAGE 2.1 MILLION SMALLEST 225,600 RATES OF ESPU GROWTH Segment Averages LARGEST INCREASE LARGEST DECLINE Dave & Buster s Entertainment Inc. has found a way for a Casual-Dining chain to generate higher sales: Be less of a restaurant and be more of an amusement park. The 90 units the company operated in its Latest Year, up from 80 the Preceding Year, are 30,000-square-foot palaces devoted to games and sports and, oh yeah, a little food. The result is an industry-leading Estimated Sales Per Unit of 11.7 million. What s more, that number is growing. ESPU grew 3.6 percent in the Latest Year, and 4.9 percent the year before that. At a time when consumers have been abandoning dine-in chains, they ve been flocking to Dave & Buster s in amazing numbers. Once guests are in our stores, we want to sell them the complete experience, including our food and beverage offerings, CEO Stephen King said on the company s earnings call this month. Consumers have been shying away from Casual-Dining chains for more than a decade, a downturn that has taken a turn for the worst more recently amid a challenging market for the industry. Despite the growth at Dave & Buster s, for instance, Casual-Dining chains average rate of ESPU growth was negative, down 1.5 percent in the Latest Year. In the Preceding Year, the Casual-Dining segment had the lowest average ESPU growth, 0.8 percent, of any Top 100 segment. Chains that can offer experiences to their consumers are the exception. Right behind Dave & Buster s on our ranking is Cheesecake Factory Inc., where ESPU was 10.9 million up 3.8 percent from the Preceding Year. Cheesecake and Dave & Buster s had the best growth performances in sales per unit among Casual-Dining chains on our ranking. Dave & Buster s has had a remarkable run in recent years. Revenue at the Dallas-based company has grown by two-thirds since 2013, to just more than 1 billion for its North American operations, according to the company s financials. Food is only part of the equation. Just 45 percent of Dave & Buster s revenue comes from the sale of food and drinks. The rest of it, 55 percent, comes from those amusements. And those amusements are getting more and more complex. Consider that, late last year, the n Dave & Buster s wins big on fun and games, while convenience stores beef up prepared foods and Chick-fil-A is, well, at it again. chain debuted Rock Em Sock Em Robots a giant-sized version of the original kids toy. Only the 6-inch robots have been replaced by 5-foot versions. We lead with amusement, King added. It is a point of differentiation for us and is the focus of our advertising. Those games are also profitable. Consider that the cost of amusements in the company s latest fiscal year was 65.4 million, or 11.8 percent of the revenue generated by those amusements. By comparison, the cost of food and beverages was million, or 25.4 percent of foodservice revenue. We re really cognizant of the fact that driving [food and beverage sales] at the expense of amusements would really be a bad trade for us, given the margin differential, King said. C-stores increase their sales Consumers have been spreading their restaurant dollars around, and not just to restaurants. Convenience stores have become strong competitors in the prepared food business, and the Latest Year was no exception. For the convenience stores on our ranking, estimated sales per unit averaged 3.2 percent growth, adding to the 7.4 percent growth of the Preceding Year. Only bakery/café chains (up 7 percent) and specialty concepts like Panda Express (up 3.3 percent) had better performance from a unit level standpoint. That includes Wawa, where ESPU grew 5 percent to 2.5 million, following nearly 10 percent ESPU growth the year before. Sales per unit grew 2 percent at Sheetz, to 1.4 million. And they grew 6 percent at Casey s General Store, to 490,200. Chick-fil-A. Again. Every one of the 10 restaurant chains with the largest sales per unit is a Casual-Dining concept, which is to be expected given their larger unit sizes and higher check averages. And then there s No. 11, Chick-fil-A, which again has the largest sales per unit of any Limited-Service concept in the Top 100. The Atlanta-based chain s sales per unit are 3.9 million. In other words: One Chick-fil-A equals one McDonald s and one Burger King. And they re not open on Sundays. n jonathan.maze@penton.com Bakery-Cafe LSR/Mexican Average rate of ESPU growth 0.9 for Top 100 chains RATES OF ESPU GROWTH: Chain Rates LARGEST INCREASE LARGEST 4.2 MILLION LARGEST DECLINE 23.1 AVERAGE ESPU Segments SMALLEST 938,100 Pizza Casual Dining 66 CHAINS SAW ESPU GROWTH IN THE LATEST YEAR.

19 TOP 100 Unit-Level Trends ESTIMATED SALES PER UNIT AND AVERAGE UNIT VOLUME* (Dollars in thousands) LATEST YEAR YEAR PRIOR YEAR LATEST AVG. UNIT VOLUME 1 1 Dave & Buster s 11, , , , Jan The Cheesecake Factory 10, , , Dec Yard House 8, , , May BJ s Restaurant & Brewhouse 5, , , Dec Ruth s Chris Steak House 5, , , Dec Texas Roadhouse 4, , , , Dec Olive Garden 4, , , May Cracker Barrel Old Country Store 4, , , , July Cheddar s Scratch Kitchen 4, , , Dec P.F. Chang s China Bistro 4, , , Dec Chick-fil-A 3, , , Dec Red Lobster 3, , , May Golden Corral 3, , , , Dec LongHorn Steakhouse 3, , , May Outback Steakhouse 3, , , , Dec Buffalo Wild Wings 3, , , Dec California Pizza Kitchen 3, , , , Dec Bonefish Grill 2, , , , Dec TGI Fridays 2, , , Dec Carrabba s Italian Grill 2, , , , Dec Red Robin Gourmet Burgers and Brews 2, , , , Dec Chili s Grill & Bar 2, , , June Whataburger 2, , , , Dec In-N-Out Burger 2, , , Dec Panera Bread 2, , , Dec McDonald s 2, , , Dec Krispy Kreme Doughnuts 2, , , Jan Jason s Deli 2, , , , Dec Wawa 2, , , Dec Logan s Roadhouse 2, , , July Hooters 2, , , Dec Applebee s Neighborhood Grill & Bar 2, , , , Dec O Charley s 2, , , , Dec Raising Cane s Chicken Fingers 2, , , Dec Culver s 2, , , , Dec Zaxby s 2, , , Dec IHOP 1, , , , Dec Steak n Shake 1, , , Dec Chipotle Mexican Grill 1, , , , Dec Bojangles Famous Chicken n Biscuits 1, , , , Dec El Pollo Loco 1, , , , Dec Costco 1, , , Aug Bob Evans Restaurants 1, , , April Denny s 1, , , , Dec Perkins Restaurant & Bakery 1, , , , Dec Chuck E. Cheese s 1, , , Dec McAlister s Deli 1, , , , Dec Wendy s 1, , , Dec Panda Express 1, , , , Dec Jack in the Box 1, , , , Sept. 16 FISCAL YEAR-END * AUV, AS OPOSSED TO ESPU, REPRESENTS COMPANY-REPORTED FIGURES OR DATA FROM PUBLIC DOCUMENTS. AUV CALCULATIONS MAY DIFFER BY BRAND. AUV IS ASSUMED TO BE DOMESTIC SYSTEMWIDE FIGURES. YEAR-OVER-YEAR AUV COMPARISON MAY BE 53-WEEKS TO 52, OR INVOLVE RESTATEMENT OF 53-WEEKS TO TRAILING 52. EXCEPTIONS: 1: COMPANY-OWNED UNITS AUV; 2: FRANCHISED UNITS AUV; 3: WORLDWIDE FRANCHISED AUV; 4: SAME-STORE COMPANY-OWNED AUV; 5: AUV FOR 65 NEWLY CONSTRUCTED GRILL & CHILL RESTAURANTS OPENED AFTER JAN. 1, 2014; 6: COMPANY-OWNED AUV, EXCLUDING LIMITED-SERVICE OUTLETS; 7: SYSTEM UNITS OPEN AT LEAST 12 MONTHS. SOURCE: NRN RESEARCH

20 TOP 100 Unit-Level Trends ESTIMATED SALES PER UNIT AND AVERAGE UNIT VOLUME* (Dollars in thousands) LATEST YEAR YEAR PRIOR YEAR LATEST AVG. UNIT VOLUME Ruby Tuesday 1, , , May Taco Bell 1, , , , Dec White Castle 1, , , , Dec Popeyes Louisiana Kitchen 1, , , Dec Starbucks Coffee 1, , , Sept Sheetz 1, , , Sept Del Taco 1, , , , Dec Carl s Jr. 1, , , Jan Burger King 1, , , Dec Boston Market 1, , , , Dec Sonic Drive-In 1, , , , Aug Hardee s 1, , , Jan Krystal 1, , , Dec Qdoba Mexican Eats 1, , , , Sept Arby s 1, , Dec Five Guys Burgers and Fries 1, , , , Dec Wingstop 1, , , , Dec Noodles & Company 1, , , , Dec KFC 1, , Dec Captain D s Seafood Kitchen 1, , , Dec Moe s Southwest Grill 1, , , Dec Cicis 1, , Dec Potbelly Sandwich Shop 1, , , Dec Round Table Pizza 1, , Dec Domino s 1, Dec Tim Hortons 1, Dec Checkers 1, , Dec Dunkin Donuts Dec Papa John s Pizza Dec Little Caesars Pizza Dec Jimmy John s Gourmet Sandwiches Dec Dairy Queen Dec Einstein Bros. Bagels Dec Dickey s Barbecue Pit May Pizza Hut Dec Jersey Mike s Subs Dec Church s Chicken Dec Long John Silver s Dec Firehouse Subs Dec Marco s Pizza Dec Jamba Juice Dec Waffle House May Papa Murphy s Take N Bake Pizza Dec Casey s General Store April Auntie Anne s Dec Subway Dec Eleven Dec Target Cafe (Target stores) Jan Baskin-Robbins Dec Circle K April 17 AVERAGES: 2, , , FISCAL YEAR-END

21 TOP 100 Unit-Level Trends AVERAGE ESPU GROWTH BY SEGMENT Percent Change LATEST VS. VS. PRIOR BAKERY-CAFE GROWTH LEADER: Tim Hortons, Five Takeaways LSR/SPECIALTY GROWTH LEADER: Panda Express, 8.1 C-STORE GROWTH LEADER: Casey s General Store, Growth in sales per unit was not widespread or uniform among the 100 largest chains tracked by NRN. Here are five revelations from chains Estimated Sales Per Unit data BEVERAGE-SNACK GROWTH LEADER: Starbucks Coffee, 7.0 PIZZA GROWTH LEADER: Domino s, TIM HORTONS SURGES Tim Hortons led all chains on the Top 100 in growth in Estimated Sales Per Unit. The Bakery-Cafe chain s unit-level sales grew 14.9 percent in the Latest Year, following 17.5 percent growth the Preceding Year, going from unit-level volumes of 746,300 two years ago to just more than 1 million in the Latest Year. Tim Hortons did this through same-store sales growth, but it also closed underperforming locations two years ago LSR/BURGER GROWTH LEADER: Whataburger, 6.8 CHICKEN GROWTH LEADER: Chick-fil-A, 10.7 IN-STORE GROWTH LEADER: Costco, CHIPOTLE COMES BACK TO EARTH The biggest decline in ESPU was endured by, not surprisingly, Chipotle Mexican Grill Inc. The burrito chain s average unit-level sales declined by more than 23 percent in the Latest Year, following a 2.4 percent decline the Preceding Year. That drop has taken the chain s unit volumes down from a strong 2.4 million two years ago to just over 1.8 million in the Latest Year. 3. DINE-IN CHAINS LOSE MOMENTUM Consumers abandoned Casual Dining in the Latest Year. Casual- Dining chains average growth in estimated sales per unit was a negative 1.5 percent in the latest year. Family-Dining chains average growth in ESPU was a negative 0.7 percent in the Latest Year LSR/SANDWICH GROWTH LEADER: Arby s, 6.0 FAMILY DINING GROWTH LEADER: Cracker Barrel Old Country Store, SANDWICH CHAINS GET WEAK Another surprisingly weak performer among industry segments was Sandwiches, where average growth in ESPU declined by 0.2 percent in the Latest Year despite 6-percent growth in ESPU by Arby s. Subway, the largest chain in that group, saw its Latest-Year ESPU decline by 1 percent, following a 4.5-percent decline the year before. But Jimmy John s Latest-Year ESPU also declined, by more than 3 percent, as did Potbelly s, by 1.8 percent CASUAL DINING GROWTH LEADER: The Cheesecake Factory, 3.7 LSR/MEXICAN GROWTH LEADER: Del Taco, PANDA BOOMS Quietly, large Chinese chain Panda Express continues to flourish. Estimated Sales Per Unit increased 8 percent in the Latest Year to 1.58 million, from 1.46 million. Indeed, over the past two years, Panda s unit-level volumes have increased 15.6 percent. Jonathan Maze

22 TOP 100 Market Share Trends MARKET SHARE BY THE NUMBERS Beverage-Snack, Chicken lead market share growth Half of 12 restaurant categories see gains in Latest Year BY RON RUGGLESS out of 6TWELVE segments in the Top 100 gained market share in the latest year. SEGMENTS THAT GAINED SHARE Segments posting the biggest share gains this year in the Top 100 were Beverage-Snack and Chicken. Six of the 12 categories booked market share growth, based on the segments aggregate sales as a percentage of all the Top 100 sales in the Latest Year. Besides Beverage-Snack and Chicken, gainers included Pizza, Convenience Store, Bakery-Café and LSR/Specialty. Five categories experienced market share losses, including Casual Dining, LSR/Burger, Family Dining, LSR/Sandwich and LSR/Mexican. In-Store café market share was flat despite the turmoil in brick-and-mortar retail. Seattle-based Starbucks Coffee, with 13,172 domestic units at the end of 2016, has been working on food offerings to complement signature beverages, especially in the breakfast daypart. These initiatives led the category to increase to 11.1 percent of Top 100 sales in the Latest Year, up from 10.5 percent in the Preceding Year. Starbucks stays on top As in the Preceding Year, Starbucks remained the sole brand in the strong Beverage-Snack category to gain market share, inching up to 62.7 percent from 61.6 percent in the category s Preceding Year. Segment No. 2 player Dunkin Donuts slipped to 28.8 percent in the Latest Year from 29.4 percent in the Preceding Year. At the end of the second quarter ended April 2, Starbucks said food represented 21 percent of its U.S. revenue and helped increase its same-store sales by as much as 2 percentage points. We have demonstrated that by focusing on a specific daypart, we can create new customer occasions that add to the branded experience and become long-term drivers of growth, Kevin Johnson, Starbucks CEO, said in an April analyst call. On April 11, the company launched upgraded lunch offerings with a Mercato menu at more than 100 locations in Chicago. The company said more than half its customers patronize after 11 a.m., and the menu of grab-and-go salads, sandwiches and sides was aimed at those patrons. This effort, Johnson said, was focused to unlock growth in all dayparts. With the Chicago launch, Starbucks said it had grown its food business by n Starbucks continues to be the hottest name in a hot category, Beverage- Snack. The chain increased its market share to a whopping 62.7 percent. n Another meaty segment is Chicken, led by Chick-fil-A, which boosted its market share there to 36 percent. 1.5 times since 2013 and set the goal of doubling it by Another wave of Starbucks technology, layered on the mobile order and pay app, will be deployed to the company s highest volume locations this quarter. Such innovations allowed Starbucks to increasingly nibble at market share against category competitors like Dunkin Donuts and Krispy Kreme Doughnuts. Chicken leans in The Chicken segment also increased its market share in the Latest Year, with the category growing to 8.5 percent of Top 100 sales from 8 percent in the Preceding Year. About half the brands gained market share in the Latest Year, led by Chickfil-A, which increased its lead to 36.0 percent of the category from 33.9 percent in Preceding Year. The Bakery-Café category also nudged upward in the Latest Year s market share, led by gains for both Panera Bread and Tim Horton s. Panera continued in the Latest Year to invest in its clean menu positioning and to adding technology to restaurants as part of its Panera 2.0 initiative. Tim Horton s, under parent Restaurant Brands International Inc., closed nearly 20 percent of its franchised stores, many of them kiosks and non-traditional locations that had lower unit volumes, and began building new traditional restaurants with higher average volumes. Market share losses in the Latest Year were spread across the half dozen categories, with the most dramatic haircut in Casual Dining, which saw its share trimmed to 15.2 percent from 15.7 percent in the Preceding Year. The Casual-Dining category was almost evenly split among those losing market share and those gaining. The traditional grill-and-bar players generally lost ground to the entertainment-focused concepts like Dave & Busters, which saw a 15.8 percent change in U.S. Systemwide Sales in the Latest Year. n ronald.ruggless@penton.com Beverage- Snack C-Store Bakery-Cafe LSR/Specialty LSR/Burger Chicken SEGMENTS THAT LOST SHARE LSR/Mexican Casual Dining SEGMENTS WHOSE SHARE REMAINED FLAT In-Store Pizza LSR/Sandwich Family Dining CHAINS DOMINATING SEGMENT SALES 78.8 Bakery-Cafe 60.6 LSR/Mexican Sandwich 62.7 Beverage-Snack 58.9 LSR/Specialty LSR/Burger

23 TOP 100 Market Share Trends The LSR/Burger segment had the greatest percentage of market share in terms of sales and unit count, but the results marked a slight decline from the Preceding Year. Casual Dining s general segment weakness showed as the segment lost the greatest sales market share in the Latest Year, a 0.5-percent decrease. And the Beverage-Snack segment saw notable growth in share, driven by giants like Starbucks Coffee. SEGMENT SHARE OF TOP 100 SALES SEGMENT SHARE OF TOP 100 UNITS LSR/BURGER LSR/BURGER 18.0 LSR/SANDWICH 15.2 CASUAL DINING 13.5 BEVERAGE-SNACK 11.1 BEVERAGE-SNACK 8.5 CHICKEN 8.1 PIZZA 7.9 LSR/SANDWICH 6.0 LSR/MEXICAN 5.1 FAMILY DINING 2.7 C-STORE 2.4 BAKERY-CAFE 2.4 OTHER* 12.2 PIZZA 7.7 C-STORE 6.5 CHICKEN 5.8 CASUAL DINING 5.2 LSR/MEXICAN 3.6 FAMILY DINING 3.3 OTHER* 1.7 BAKERY-CAFE *OTHER: IN-STORE AND LSR/SPECIALTY (INCLUDES BARBECUE, CHINESE, NOODLE AND SEAFOOD CHAINS) NOTE: MAY NOT ADD TO 100 BECAUSE OF ROUNDING SOURCE: NRN RESEARCH cr_jtp43_nrn_ _mkt Share graph MV.indd 43 6/9/17 5:22 PM

24 TOP 100 Market Share Trends Share of Top 100 Sales Limited Service/Burger (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 McDonald s È È Burger King È Ç Wendy s È Ç Sonic Drive-In 5.76 Ç 5.69 Ç Dairy Queen 4.59 Ç 4.58 Ç Jack in the Box 4.47 Ç 4.42 Ç Hardee s 2.86 Ç Whataburger 2.78 Ç 2.61 Ç Carl s Jr È 1.95 È Five Guys Burgers and Fries 1.76 Ç 1.72 Ç Culver s 1.66 Ç 1.56 Ç Steak n Shake Ç In-N-Out Burger 1.08 Ç 1.05 Ç White Castle 0.72 Ç 0.71 È Checkers 0.70 Ç 0.66 È Krystal Segment share of Top 100 sales: Latest: È30.54 Preceding: È30.95 Prior: Limited Service/Mexican (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Taco Bell Ç È Chipotle Mexican Grill È Ç Qdoba Mexican Eats 5.27 Ç 4.89 Ç Del Taco 4.83 Ç 4.56 È Moe s Southwest Grill 4.46 Ç 4.17 Ç 4.04 Segment share of Top 100 sales: Latest: È6.00 Preceding: Ç6.19 Prior: 6.04 Limited Service/Sandwich (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Subway È È Arby s Ç Ç Jimmy John s Gourmet Sandwiches Ç 9.98 Ç Jersey Mike s Subs 4.07 Ç 3.40 Ç Firehouse Subs 3.33 Ç 3.23 Ç Jason s Deli 3.19 È 3.25 Ç McAlister s Deli 2.92 Ç 2.76 Ç Potbelly Sandwich Shop 2.11 Ç 1.96 Ç 1.74 Segment share of Top 100 sales: Latest: È7.89 Preceding: È7.99 Prior: 8.26 Limited Service/Specialty (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Panda Express Ç Ç Noodles & Company È Ç Captain D s Seafood Kitchen È È Long John Silver s È È Dickey s Barbecue Pit 8.59 Ç 8.54 È 8.68 Segment share of Top 100 sales: Latest: Ç1.92 Preceding: Ç1.81 Prior: 1.76 NOTE: FIGURES MAY NOT ADD TO 100 BECAUSE OF ROUNDING. Casual Dining (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Applebee s Neighborhood Grill & Bar È Ç Olive Garden Ç 9.79 È Buffalo Wild Wings 9.48 Ç 9.17 Ç Chili s Grill & Bar 8.89 È 9.17 È Outback Steakhouse 6.43 È 6.56 È Red Lobster 6.21 Ç 6.12 È Texas Roadhouse 5.85 Ç 5.42 Ç The Cheesecake Factory 5.30 Ç 4.88 Ç LongHorn Steakhouse 4.21 Ç 4.12 Ç Red Robin Gourmet Burgers and Brews 3.84 Ç TGI Fridays 3.54 È 3.91 È BJ s Restaurant & Brewhouse 2.55 Ç 2.36 Ç Dave & Buster s 2.54 Ç 2.19 Ç Ruby Tuesday 2.48 È 2.93 È P.F. Chang s China Bistro 2.32 È 2.34 Ç Hooters 2.11 Ç 2.10 È Cheddar s Scratch Kitchen 1.88 Ç 1.83 Ç Carrabba s Italian Grill 1.81 È 1.87 È California Pizza Kitchen 1.69 Ç 1.68 È Ruth s Chris Steak House 1.65 Ç 1.58 Ç Bonefish Grill 1.62 È 1.63 È Logan s Roadhouse 1.60 È 1.75 È Yard House 1.36 Ç 1.30 Ç O Charley s 1.29 È 1.35 È 1.38 Segment share of Top 100 sales: Latest: È15.17 Preceding: È15.74 Prior: Beverage-Snack (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Starbucks Coffee Ç Ç Dunkin Donuts È È Krispy Kreme Doughnuts 2.66 È 2.73 È Baskin-Robbins 2.08 È 2.25 È Jamba Juice 1.92 È 2.04 È Auntie Anne s 1.91 È 2.02 È 2.08 Segment share of Top 100 sales: Latest: Ç11.13 Preceding: Ç10.45 Prior: 9.96 Family Dining (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 IHOP È Ç Cracker Barrel Old Country Store Ç Ç Denny s Ç È Golden Corral È È Waffle House 9.42 Ç 9.24 Ç Bob Evans Restaurants 6.65 È 7.22 È Perkins Restaurant & Bakery 4.79 È 4.89 È 4.99 Segment share of Top 100 sales: Latest: È5.12 Preceding: È5.31 Prior: 5.38

25 TOP 100 Market Share Trends Chicken (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Chick-fil-A Ç Ç KFC È È Popeyes Louisiana Kitchen È Ç Zaxby s 7.53 Ç 7.32 Ç Bojangles Famous Chicken n Biscuits 5.62 È 5.80 Ç Wingstop 4.31 Ç 4.06 Ç Church s Chicken 3.66 È 4.21 È El Pollo Loco 3.63 È 3.79 È Raising Cane s Chicken Fingers 2.93 Ç 2.56 Ç Boston Market 2.73 È 3.11 È 3.36 Segment share of Top 100 sales: Latest: Ç8.52 Preceding: Ç8.02 Prior: 7.65 Pizza (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Pizza Hut È È Domino s Ç Ç Little Caesars Pizza È È Papa John s Pizza Ç È Chuck E. Cheese s 4.25 È 4.42 È Papa Murphy s Take N Bake Pizza 4.25 È 4.39 È Marco s Pizza 2.35 Ç 2.08 Ç Cicis 2.16 È 2.20 È Round Table Pizza È 2.13 Segment share of Top 100 sales: Latest: Ç8.10 Preceding: Ç8.08 Prior: 8.00 C-Store (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR Eleven È È Wawa Ç Ç Casey s General Store Ç Ç Circle K Ç Ç Sheetz Ç Ç Segment share of Top 100 sales: Latest: Ç2.67 Preceding: Ç2.60 Prior: 2.50 Bakery-Cafe (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Panera Bread Ç È Tim Hortons Ç Ç Einstein Bros. Bagels 8.71 È 9.13 È 9.21 Segment share of Top 100 sales: Latest: Ç2.43 Preceding: Ç2.36 Prior: 2.31 In-Store (Chain share of segment sales) LATEST YEAR YEAR PRIOR YEAR 1 1 Costco Ç Ç Target Cafe (Target stores) È È Segment share of Top 100 sales: Latest: 0.51 Preceding: Ç0.51 Prior: 0.50 SOURCE: NRN RESEARCH

26 TOP 100 Market Share Trends Chains that have easily dominated their segments in the past found it harder to hold onto market share in the Latest Year. Find out which legacy chains stumbled and which chains are poised to take over. Lisa Jennings 1. BURGER GIANTS LOSE GROUND Segment sales leader Limited Service/Burger continued to lose share of total Top 100 sales in the Latest Year, as its aggregate sales rose by 2.2 percent, to 78.5 billion, compared with growth rates as high as 10.4 percent among smaller segments. Within the segment, McDonald s, Burger King and Wendy s and Carl s Jr. lost share, but maintained their segment ranks. Whataburger picked up the most market share, with a 0.2-percent gain. White Castle and Checkers also gained share in the Latest Year. Ten Takeaways 2. OLIVE GARDEN GAINS It was a rough year for Casual-Dining segment leader Applebee s. Still, its market share loss was modest and the chain remained in the lead within the category. A bold move to wood-fired grills and hand-cut steaks in 2016 fell flat, and Julia Stewart, CEO of parent company DineEquity Inc., stepped down. Former Brinker International executive John Cywinski was named president in March and has pledged a turnaround. Olive Garden, meanwhile, gained significant market share in the Latest Year, as did former sister brand Red Lobster. 3. STARBUCKS STRONG YEAR The Beverage-Snack segment s aggregate Latest-Year sales of 28.6 billion gave it a 11.1-percent share of total Top 100 sales, up from a 10.5-percent Preceding-Year share. Though all of the Beverage-Snack chains increased sales in the Latest Year, with impressive segmentwide average growth of 6.4-percent, Starbucks crushed all comers with 12.4-percent sales growth to end up as the only brand showing a market share gain. 5. DOMINO S EYES TOP Within the Pizza segment, Domino s gained more than a full percentage point in market share, while category leader Pizza Hut lost nearly as much. If the pattern continues, Domino s, which also recorded double-digit increases in sales growth, could be close to taking the top ranking in the category. Papa John s Pizza, meanwhile, ticked up a bit in market share, showing a small gain in the Latest Year. 8. IHOP LOSES SHARE Cracker Barrel Old Country Store is close to capturing the market share lead in the Family-Dining segment. Top-ranking IHOP, with almost 24 percent of share, lost ground in the Latest Year, while Cracker Barrel, Denny s and Waffle House gained ground. If trends continue, Cracker Barrel could take the lead. However, both IHOP and Denny s are diving into delivery, which could change the equation in Family Dining. 6. SUBWAY STILL DOMINATES With both sales and unit counts in decline, Subway s market share dominance within the Limited-Service/Sandwich segment continued to erode significantly, losing more than 2 percentage points, to 55.7 percent. But Subway remains by far ahead in the category, despite every sandwich brand gaining ground, except Jason s Deli, which shed market share in the Latest Year. 7. TACO BELL SOLIDIFIES POSITION Some of the most dramatic market share shifts were seen in the Limited-Service/ Mexican category, where Taco Bell won more than 3 percentage points and where Chipotle Mexican Grill lost more than 4 percentage points as it struggled to recover from a series of foodborne illness outbreaks in Taco Bell strengthened its position as segment leader with more than 60 percent of market share. Smaller gains were also realized by Qdoba Mexican Eats, Del Taco and Moe s Southwest Grill. 9. NOODLES & COMPANY CLIMBS Within the Limited-Service/Specialty category, Noodles & Company bumped Captain D s Seafood Kitchen for the No. 2 slot in the ranking. But Noodles & Company also lost market share, despite a more-than-7-percent increase in sales and unit count. Category leader Panda Express gained more than 2 percentage points in market share, maintaining its healthy lead, at about 59 percent of segment sales. 4. CHICK-FIL-A STEALS SHARE Chick-fil-A is a legacy brand, but that hasn t stopped it from stealing market share. The chain increased market share by more than 2 percentage points in the Latest Year, to 36 percent. KFC lost more than a full percentage point in the Chicken category, despite a marketing push that helped grow sales more than 3 percent. Popeyes Louisiana Kitchen and Bojangles Famous Chicken n Biscuits also lost market share in the Latest Year. 10. IN-STORE SHARE STAYS FLAT The In-Store category seemed quiet, as its share of Top 100 sales remained flat at 0.5 percent in the Latest Year, but within the segment, Costco gained 2 percent market share from Target. Target has been moving away from its in-house Target Cafe brand to expand outside foodservice operators like Starbucks and Freshii.

27 TOP 100 Limited Service Regional, specialty chains dominate Limited Service Growth leader Jersey Mike s Subs shares keys to success BY BRET THORN LSR BY THE NUMBERS TOTAL U.S. SALES: 119.1B 2.3 FROM 116.4B A YEAR AGO SEGMENT SALES LEADER Specialty chains and regional favorites dominated growth in the Limited-Service segment in the Latest Year. That included chains with culinary specialties, like Panda Express, which rose from No. 29 to No. 26 among all Top 100 chains, in terms of annual domestic sales, on a 13.8-percent sales increase in the Latest Year, and Dickey s Barbecue Pit, a newcomer to the Top 100 as a result of 10.3-percent sales growth. Regional favorites were especially dominant among Limited-Service Burger chains, and included Whataburger, based in San Antonio, which saw 9-percent sales growth in the Latest Year; Culver s, based in Prairie du Sac, Wis., whose sales rose 8.8 percent; and Checkers, based in Tampa, Fla., with sales rising 8.3 percent. By comparison, the three biggest burger chains saw meager growth. No. 1 McDonald s, still in turnaround mode after a couple of challenging years, saw sales growth of 1.5 percent in the Latest Year. Burger King and Wendy s posted 2-percent and 0.6-percent sales increases, respectively. As a result, Burger King slipped from being the fourth-largest Top 100 chain to the fifth, and Wendy s slipped from fifth place to sixth. Taco Bell, with 6.1-percent growth, leapt from sixth place to fourth. However, the biggest three chains still generated domestic sales of 54.8 billion in the Latest Year, an increase of more than 780 million from the Preceding Year. The fastest-growing Limited-Service chain in the Latest Year was Jersey Mike s Subs, which saw sales increase 22.2 percent, catapulting it from the 71st spot to 60th. The chain opened a net 141 new restaurants in the Latest Year, and Estimated Sales Per Unit rose 4.2 percent. Jersey Mike s president Hoyt Jones attributed the chain s success to prioritizing operational excellence. We really focused on training in the stores, Jones said. We ve done literally hundreds and hundreds of training sessions around the country last year. Jersey Mike s also increased spending on national television advertising, particularly around professional and n Jersey Mike s sales growth is best-in-class in Limited Service while Panda Express is on the move in specialty chains. n The big three in burgers overall No. 1 McDonald s, Burger King and Wendy s barely moved the needle. college sports, reinforced by digital advertising on platforms such as ESPN Highlights. Jones said national TV, radio and digital advertising reinforce each other with Jersey Mike s customers, adding to the chain s overall presence in their psyches. I don t think you can do one without the other, he said. Jersey Mike s also rolled out a new online ordering platform and app, which let customers skip the line. Customers can pre-pay, creating efficiency for guests and franchisees, Jones said. It s been positively received by both our operators and our customers, he said. Jersey Mike s information technology team developed the software for the platform in-house. [CEO] Peter [Cancro] was very forward-thinking, Jones said. About 10 years ago, we began writing our own software for our proprietary POS system. Since then, Jersey Mike s IT team has fine-tuned the software, developed ordering software and maintained the chain s loyalty program. There s quite a few people working on it on a daily basis, keeping it relevant, Jones said. Panda Express also attributed its success to a commitment to ambience, food and service. Elevating our food and guest experience remains at the heart of what we do, said Thien Ho, director of corporate communications at Panda Express. New menu items, such as Pacific Chili Shrimp and General Tso s Chicken, helped generate news for the chain, as did the introduction of the chork, a fork-chopstick hybrid that became a viral sensation. Ho described the utensil as a symbol of American Chinese identity, reinforcing Panda Express branding. Overall, we believe that all our efforts resonated with loyal and new guests who appreciate Panda as an ambassador of American Chinese culture and food, Ho said. n bret.thorn@penton.com 36.4B TOTAL U.S. UNITS 95, from 94,577 a year ago SALES GROWTH LARGEST GROWTH AVERAGE +5.0 LARGEST DECLINE ESTIMATED SALES PER UNIT LARGEST 2.7 MILLION AVERAGE 1.4 MILLION SMALLEST 420,800

28 TOP 100 Limited Service SEGMENT INSIGHTS: Limited Service/Burger Sales Segment totals: Latest: 78,487.5 Preceding: 76,765.4 Prior: 73,813.8 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 McDonald s 36, , , Burger King 9, , , Wendy s 9, , , Sonic Drive-In 4, , , Dairy Queen 3, , , Jack in the Box 3, , , Hardee s 2, , , Whataburger 2, , , Carl s Jr. 1, , , Five Guys Burgers and Fries 1, , , Culver s 1, , , Steak n Shake 1, , In-N-Out Burger White Castle Checkers Krystal Units Segment totals: Latest: 45,212 Preceding: 44,992 Prior: 44,912 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 McDonald s 14,155 14,259 14, Burger King 7,156 7,127 7, Wendy s 5,739 5,722 5, Dairy Queen 4,465 4,449 4, Sonic Drive-In 3,557 3,526 3, Jack in the Box 2,254 2,248 2, Hardee s 1,848 1,805 1, Five Guys Burgers and Fries 1,284 1,215 1, Carl s Jr. 1,163 1,153 1, Whataburger Culver s Steak n Shake Checkers White Castle Krystal In-N-Out Burger ESPU Segment averages: Latest: 1,623.9 Preceding: 1,587.6 Prior: 1,512.9 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 2 Whataburger 2, , , In-N-Out Burger 2, , , McDonald s 2, , , Culver s 2, , , Steak n Shake 1, , , Wendy s 1, , , Jack in the Box 1, , , White Castle 1, , , Carl s Jr. 1, , , Burger King 1, , , Sonic Drive-In 1, , , Hardee s 1, , , Krystal 1, , , Five Guys Burgers and Fries 1, , , Checkers 1, Dairy Queen Sales Growth Segment averages: Latest: 3.91 Preceding: Whataburger Culver s Checkers Five Guys Burgers and Fries In-N-Out Burger Hardee s Jack in the Box Sonic Drive-In Krystal White Castle Dairy Queen Steak n Shake Burger King Carl s Jr McDonald s Wendy s Unit Growth Segment averages: Latest: 1.87 Preceding: Culver s Five Guys Burgers and Fries In-N-Out Burger Steak n Shake Checkers Hardee s Krystal Whataburger Sonic Drive-In Carl s Jr Burger King Dairy Queen Wendy s Jack in the Box McDonald s White Castle ESPU Growth Segment averages: Latest: 2.22 Preceding: Whataburger Checkers White Castle Jack in the Box Sonic Drive-In Dairy Queen Krystal McDonald s Burger King Culver s Hardee s In-N-Out Burger Carl s Jr Wendy s Steak n Shake Five Guys Burgers and Fries SOURCE: NRN RESEARCH

29 TOP 100 Limited Service SEGMENT INSIGHTS: Limited Service/Specialty Sales Segment totals: Latest: 4,932.1 Preceding: 4,496.3 Prior: 4,124.7 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Panda Express 2, , , Noodles & Company Captain D s Seafood Kitchen Long John Silver s Dickey's Barbecue Pit Units Segment totals: Latest: 4,230 Preceding: 4,072 Prior: 3,981 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Panda Express 1,893 1,790 1, Long John Silver s Dickey s Barbecue Pit Noodles & Company Captain D's Seafood Kitchen ESPU Segment averages: Latest: 1,035.3 Preceding: 1,000.9 Prior: EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Panda Express 1, , , Noodles & Company 1, , , Captain D s Seafood Kitchen 1, , Dickey s Barbecue Pit Long John Silver's Sales Growth Segment averages: Latest: 6.48 Preceding: Panda Express Dickey s Barbecue Pit Noodles & Company Captain D's Seafood Kitchen Long John Silver s Unit Growth Segment averages: Latest: 3.74 Preceding: Dickey s Barbecue Pit Noodles & Company Panda Express Captain D s Seafood Kitchen Long John Silver's ESPU Growth Segment averages: Latest: 3.26 Preceding: Panda Express Long John Silver's Dickey s Barbecue Pit Captain D s Seafood Kitchen Noodles & Company SOURCE: NRN RESEARCH NEWS. INSIGHTS. TRENDS. delivered straight to your inbox Sign up for our free enewsletters at

30 TOP 100 Limited Service SEGMENT INSIGHTS: Limited Service/Burger Service/Mexican Sales Segment totals: Latest: 15,426.5 Preceding: 15,356.8 Prior: 14,148.2 SEGMENT INSIGHTS: Limited Service/Sandwich Sales Segment totals: Latest: 20,273.8 Preceding: 19,824.7 Prior: 19,361.5 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Subway 11, , , Arby s 3, , , Jimmy John s Gourmet Sandwiches 2, , , Jersey Mike s Subs Firehouse Subs Jason s Deli McAlister s Deli Potbelly Sandwich Shop Units Segment totals: Latest: 35,942 Preceding: 35,584 Prior: 35,076 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Subway 26,744 26,958 27, Arby s 3,237 3,214 3, Jimmy John s Gourmet Sandwiches 2,647 2,405 2, Jersey Mike s Subs 1,187 1, Firehouse Subs 1, Potbelly Sandwich Shop McAlister s Deli Jason s Deli ESPU Segment averages: Latest: 1,112.2 Preceding: 1,115.5 Prior: 1,089.1 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Taco Bell 9, , , Chipotle Mexican Grill 3, , , Qdoba Mexican Eats Del Taco Moe s Southwest Grill Units Segment totals: Latest: 10,400 Preceding: 9,929 Prior: 9,467 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Taco Bell 6,278 6,121 5, Chipotle Mexican Grill 2,198 1,971 1, Qdoba Mexican Eats Moe s Southwest Grill Del Taco ESPU Segment averages: Latest: 1,391.4 Preceding: 1,469.4 Prior: 1,427.7 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Chipotle Mexican Grill 1, , , Taco Bell 1, , , Del Taco 1, , , Qdoba Mexican Eats 1, , , Moe s Southwest Grill 1, , ,030.3 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Jason s Deli 2, , , McAlister s Deli 1, , , Arby s 1, , Potbelly Sandwich Shop 1, , , Jimmy John s Gourmet Sandwiches Jersey Mike s Subs Firehouse Subs Subway Sales Growth Segment averages: Latest: 2.89 Preceding: 9.68 ESPU Growth Segment averages: Latest: Preceding: 4.05 Sales Growth Segment averages: Latest: 7.36 Preceding: ESPU Growth Segment averages: Latest: Preceding: Qdoba Mexican Eats Moe s Southwest Grill Del Taco Taco Bell Chipotle Mexican Grill Unit Growth Segment averages: Latest: 5.55 Preceding: Chipotle Mexican Grill Moe s Southwest Grill Qdoba Mexican Eats Taco Bell Del Taco Del Taco Qdoba Mexican Eats Taco Bell Moe s Southwest Grill Chipotle Mexican Grill Jersey Mike s Subs Potbelly Sandwich Shop Jimmy John s Gourmet Sandwiches McAlister s Deli Arby s Firehouse Subs Jason s Deli Subway Unit Growth Segment averages: Latest: 6.65 Preceding: Jersey Mike s Subs Potbelly Sandwich Shop Jimmy John s Gourmet Sandwiches Firehouse Subs McAlister s Deli Jason s Deli Arby s Subway Arby s Jersey Mike s Subs McAlister s Deli Subway Potbelly Sandwich Shop Jason s Deli Jimmy John s Gourmet Sandwiches Firehouse Subs SOURCE: NRN RESEARCH

31 TOP 100 Casual Dining Customizable occasions boost Casual-Dining leaders Dining and entertainment chain Dave & Buster s leads segment in sales growth BY RON RUGGLESS CASUAL DINING BY THE NUMBERS TOTAL U.S. SALES: 38.98B 0.1 FROM 39.03B A YEAR AGO SEGMENT SALES LEADER Leaders in Top 100 Casual-Dining sales growth shared an ability to make the occasion customizable, even though the category slipped slightly in overall market share. Dave & Buster s led the segment in systemwide U.S. sales growth in the Latest Year, up 15.8 percent from the Preceding Year, and it nearly doubled the pace of No. 2 Cheesecake Factory, at 8.6 percent, and No. 3 BJ s Restaurant & Brewhouse, at 8 percent. The distinct laggard in the segment was Ruby Tuesday, which closed more than 100 restaurants in The Maryville, Tenn.-based Casual- Dining chain posted a 15.6 percent decline in estimated sales in the Latest Year. Ruby Tuesday s closures were a symptom of the intense market share battle seen across the restaurant landscape but one that was especially acute in Casual Dining in the Latest Year. The segment s share of overall Top 100 sales fell to 15.2 percent in the Latest Year from 15.7 percent in the Preceding Year. Within the segment, specialty brands like Texas Roadhouse, Cheesecake Factory, Dave & Buster s, Buffalo Wild Wings and Olive Garden enjoyed some of the largest sales gains. But those advances were offset by declines among the traditional grill and bar concepts, including Applebee s Neighborhood Grill & Bar, Ruby Tuesday, TGI Fridays, Chili s Grill & Bar and Logan s Roadhouse. Segment sales growth leader Dave & Buster s found its ability to cater to customers demands for customization gave it extra tokens in the market share fight. Although we are certainly not immune to the macroeconomic environment, said Stephen King, CEO of Dave & Buster s, in a December third-quarter earnings call, the uniquely customizable experience we provide across four platforms eat, drink, play and watch provides us with some degree of insulation from casual-dining trends. The brand focused on new menu items in the Latest Year. n What the Casual- Dining segment lacked in market share stamina, it made up for in admirable Estimated Sales Per Unit. n Casual Dining s entertainment eatery Dave & Buster s pulled no punches in a Rock Em Sock Em year of brawny sales growth and ESPU. Menu innovation continues to be a hallmark of our brand and our guests have responded favorably to recent introduction such as Carnivore Pizzadilla and Smoked Turkey Melt as well as several new one-of-a-kind cocktails, King said in a year-end earnings call. And the entertainment aspect also got a signature flourish. Dave & Buster s in the Latest Year began providing proprietary games such as Star Trek, Tailgate Toss and Rock Em Sock Em Robots that could not be found in other venues and helped garner more return visits to the big-box sites. For the full year, Dave & Buster s sales in both food and amusements exceeded 1 billion for the first time. Casual Dining s strength remained in its ability to pull in high Estimated Sales Per Unit levels, which can easily eclipse most others in the Top 100 segments. The average ESPU for all Top 100 chains was 2.1 million in the Latest Year, up about 0.6 percent from the Preceding Year. Casual Dining s average ESPU, however, was nearly twice that average, hovering at 4.2 million per unit and down slightly from the Preceding Year. Dave & Buster s led the ESPU Casual-Dining sweepstakes in the Latest Year, booking 11.7 million per unit, up from 11.3 million in the Preceding Year. The Cheesecake Factory was No. 2 in ESPU rankings with 10.9 million per restaurant, follow by Yard House, a division of Darden Restaurants Inc., at 8.1 million. Sales growth at Dave & Buster s was also bolstered by a 12.5 percent increase in its number of U.S. units, expanding to 90 in the Latest Year from 80 at the end of the Preceding year. The concept led the Casual-Dining category in percentage of unit growth, followed by BJ s Restaurant & Brewhouse at 9.4 percent unit growth, ending the Latest Year at 187 units, and Texas Roadhouse at 4.7 percent, ending with 486. n ronald.ruggless@penton.com 4.4B TOTAL U.S. UNITS 11, from 11,656 a year ago SALES GROWTH LARGEST GROWTH AVERAGE 0.3 LARGEST DECLINE ESTIMATED SALES PER UNIT LARGEST 11.7 MILLION AVERAGE 4.2 MILLION SMALLEST 1.6 MILLION

32 SEGMENT INSIGHTS: Casual Dining Sales Segment totals: Latest: 38,980.3 Preceding: 39,032.9 Prior: 37,875.6 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Applebee s Neighborhood Grill & Bar 4, , , Olive Garden 3, , , Buffalo Wild Wings 3, , , Chili s Grill & Bar 3, , , Outback Steakhouse 2, , , Red Lobster 2, , , Texas Roadhouse 2, , , The Cheesecake Factory 2, , , LongHorn Steakhouse 1, , , Red Robin Gourmet Burgers and Brews 1, , , TGI Fridays 1, , , BJ s Restaurant & Brewhouse Dave & Buster s Ruby Tuesday , , P.F. Chang s China Bistro Hooters Cheddar s Scratch Kitchen Carrabba s Italian Grill California Pizza Kitchen Ruth s Chris Steak House Bonefish Grill Logan s Roadhouse Yard House O Charley s Sales Growth Segment averages: Latest: 0.27 Preceding: Dave & Buster s The Cheesecake Factory BJ s Restaurant & Brewhouse Texas Roadhouse Yard House Ruth s Chris Steak House Buffalo Wild Wings Cheddar s Scratch Kitchen Olive Garden LongHorn Steakhouse Red Lobster Red Robin Gourmet Burgers and Brews California Pizza Kitchen Hooters Bonefish Grill P.F. Chang s China Bistro Outback Steakhouse Carrabba s Italian Grill Chili s Grill & Bar O Charley s Applebee s Neighborhood Grill & Bar Logan s Roadhouse TGI Fridays Ruby Tuesday Units Segment totals: Latest: 11,629 Preceding: 11,656 Prior: 11,488 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Applebee s Neighborhood Grill & Bar 1,858 1,878 1, Chili s Grill & Bar 1,248 1,259 1, Buffalo Wild Wings 1,187 1,135 1, Olive Garden Outback Steakhouse Red Lobster Ruby Tuesday Red Robin Gourmet Burgers and Brews LongHorn Steakhouse Texas Roadhouse TGI Fridays Hooters Logan s Roadhouse Carrabba s Italian Grill P.F. Chang s China Bistro O Charley s Bonefish Grill California Pizza Kitchen The Cheesecake Factory BJ s Restaurant & Brewhouse Cheddar s Scratch Kitchen Ruth s Chris Steak House Dave & Buster s Yard House Unit Growth Segment averages: Latest: 0.84 Preceding: Dave & Buster s BJ s Restaurant & Brewhouse Texas Roadhouse Buffalo Wild Wings The Cheesecake Factory Yard House Red Robin Gourmet Burgers and Brews LongHorn Steakhouse Ruth s Chris Steak House Cheddar s Scratch Kitchen O Charley s Olive Garden Hooters Outback Steakhouse Logan s Roadhouse P.F. Chang s China Bistro Red Lobster Chili s Grill & Bar Applebee s Neighborhood Grill & Bar Carrabba s Italian Grill California Pizza Kitchen Bonefish Grill TGI Fridays Ruby Tuesday SOURCE: NRN RESEARCH

33 TOP 100 Casual Dining SEGMENT INSIGHTS: Casual Dining ESPU Segment averages: Latest: 4,227.0 Preceding: 4,241.9 Prior: 4,197.1 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Dave & Buster s 11, , , The Cheesecake Factory 10, , , Yard House 8, , , BJ s Restaurant & Brewhouse 5, , , Ruth s Chris Steak House 5, , , Texas Roadhouse 4, , , Olive Garden 4, , , Cheddar s Scratch Kitchen 4, , , P.F. Chang s China Bistro 4, , , Red Lobster 3, , , LongHorn Steakhouse 3, , , Outback Steakhouse 3, , , Buffalo Wild Wings 3, , , California Pizza Kitchen 3, , , Bonefish Grill 2, , , TGI Fridays 2, , , Carrabba s Italian Grill 2, , , Red Robin Gourmet Burgers and Brews 2, , , Chili s Grill & Bar 2, , , Logan s Roadhouse 2, , , Hooters 2, , , Applebee s Neighborhood Grill & Bar 2, , , O Charley s 2, , , Ruby Tuesday 1, , ,688.5 ESPU Growth Segment averages: Latest: Preceding: The Cheesecake Factory Dave & Buster s Texas Roadhouse Olive Garden Ruth s Chris Steak House Red Lobster California Pizza Kitchen LongHorn Steakhouse Hooters Cheddar s Scratch Kitchen BJ s Restaurant & Brewhouse P.F. Chang s China Bistro Yard House Bonefish Grill Outback Steakhouse Red Robin Gourmet Burgers and Brews Buffalo Wild Wings Chili s Grill & Bar Carrabba s Italian Grill O Charley s Applebee s Neighborhood Grill & Bar TGI Fridays Ruby Tuesday Logan s Roadhouse SOURCE: NRN RESEARCH

34 TOP 100 Beverage-Snack Beverage-Snack grows Top 100 impact Sizeable divide between leaders and middle of pack BY DAN ORLANDO BEVERAGE-SNACK BY THE NUMBERS TOTAL U.S. SALES: 28.6B 10.4 FROM 25.9B A YEAR AGO SEGMENT SALES LEADER The Beverage-Snack segment claimed 11.1 percent of the systemwide sales pie for the Top 100 during the Latest Year with six chains making the cut. Starbucks Coffee once again led the category in market share, moving up 1.1 percent in the Latest Year to claim 62.7 percent, and also posted a leading 7 percent growth in Estimated Sales Per Unit. Systemwide sales clocked in at 17.9 billion. That s up from nearly 16 billion from the Preceding Year and just under 14 billion from the Prior Year. The numbers were strong enough to land Starbucks in the second slot on the overall Top 100 charts for systemwide sales, right behind McDonald s. Though its closest competitor, Dunkin Donuts, slid downwards 0.7 percent to claim only 28.8 percent of the Beverage-Snack segment, the stat doesn t tell the whole story of the coffee chain s performance. Dunkin Donuts ranked seventh overall in Top 100 systemwide sales, hitting 8.2 billion in the Latest Year, up from 7.6 billion the Preceding Year. That s nearly an 8 percent jump. Dunkin also added 397 domestic locations during the Latest Year, trailing Starbucks net 651 new U.S. stores. While Starbucks may be tightening its hold on the Beverage-Snack segment, it s not due to Dunkin failing to expand in its own right. Dunkin Donuts plans to streamline its menu to combat high employee turnover rates and to ensure guests are served efficiently. In February, 300 stores took part in menu tests, and franchisees reported the prototype made it easier to train personnel. Store owners also feel that simpler n If No. 2 tries harder, then Dunkin Donuts is doing plenty behind segment leader Starbucks, such as adding more locations and introducing ready-to-drink iced coffee. n Starbucks is focusing on premium offerings with its Roastery concept. training will lead to higher retention rates. The average labor turnover rate in our industry is greater than 150 percent, Dunkin Donuts CEO Nigel Travis said while discussing results of the chain s first quarter ended April 1. By reducing this rate, Dunkin believes that it can improve the guest experience by maintaining efficiency throughout the year. A recently introduced ready-todrink retail line of iced coffee may also boost Dunkin s in-store sales in the near future due to the convenience factor that comes with grab-and-go options. However, the greater impact will likely be felt at other points of sale such as convenience stores. Starbucks will not be easing off the throttle, however. Executive chairman Howard Schultz discussed building the store s premium sub-brands at Starbucks biennial investor conference in New York City in late The company will focus on the premium Roastery and Starbucks Reserve stores, which he said will offer a higher level of design and service. The Roastery concept elevates the brand with more brewing methods, more intimacy with customers and more design theater, Schultz said. He aims to create an experience that is a magical carpet ride for consumers. The Roastery also has an average ticket that is four times larger than an average Starbucks store, he said, and could create a new source of growth and revenue for the company. The Starbucks Reserve stores will be smaller, covering about 3,000 to 4,000 square feet, borrowing artisanal food preparation from Princi, the Italian bakery and café concept in which Starbucks invested last July. Krispy Kreme Doughnuts remains third in the Beverage-Snack segment but it s a canyon away from the gold and silver medal holders on the Top 100 systemwide sales big board. Gaining one spot to climb to No. 67 overall, Krispy Kreme brought in 761 million in estimated systemwide sales. The brand is gaining ground, climbing upward from just over 708 million the Preceding Year and nearly 660 million the Prior Year. Krispy Kreme can claim only 2.7 percent of the Top 100 Beverage-Snack market, which is slightly below flat from the Preceding Year s performance. n dan.orlando@penton.com 17.9B TOTAL U.S. UNITS 26, from 25,818 a year ago SALES GROWTH LARGEST GROWTH AVERAGE RATE +6.4 SMALLEST +1.9 ESTIMATED SALES PER UNIT LARGEST 2.5 MILLION AVERAGE 1 MILLION SMALLEST 237,000

35 TOP 100 SEGMENT INSIGHTS: Beverage-Snack Sales Segment totals: Latest: 28,612.6 Preceding: 25,918.9 Prior: 23,338.6 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Starbucks Coffee 17, , , Dunkin Donuts 8, , , Krispy Kreme Doughnuts Baskin-Robbins Jamba Juice Auntie Anne s Sales Growth Segment averages: Latest: 6.40 Preceding: 7.68 Units Segment totals: Latest: 26,966 Preceding: 25,818 Prior: 24, Starbucks Coffee Dunkin Donuts Krispy Kreme Doughnuts Auntie Anne s Jamba Juice Baskin-Robbins YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Starbucks Coffee 13,172 12,521 11, Dunkin Donuts 8,828 8,431 8, Baskin-Robbins 2,517 2,503 2, Auntie Anne s 1,298 1,248 1, Jamba Juice Krispy Kreme Doughnuts Unit Growth Segment averages: Latest: 3.68 Preceding: Starbucks Coffee Krispy Kreme Doughnuts Dunkin Donuts Auntie Anne s Jamba Juice Baskin-Robbins ESPU Segment averages: Latest: 1,029.8 Preceding: 1,000.8 Prior: EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Krispy Kreme Doughnuts 2, , , Starbucks Coffee 1, , , Dunkin Donuts Jamba Juice Auntie Anne s Baskin-Robbins ESPU Growth Segment averages: Latest: 2.52 Preceding: Starbucks Coffee Dunkin Donuts Jamba Juice Krispy Kreme Doughnuts Baskin-Robbins Auntie Anne s SOURCE: NRN RESEARCH

36 TOP 100 Pizza Pizza Hut holds on to No. 1 spot in Pizza segment Growth-minded Domino s stands poised in the wings BY DAN ORLANDO PIZZA BY THE NUMBERS TOTAL U.S. SALES: 20.8B 4.0 FROM 20B A YEAR AGO SEGMENT SALES LEADER Pizza Hut retained its title as No. 1 in the Pizza segment, in terms of sales, in the Latest Year, but the Yum! Brands Inc. chain may be losing its grip on the top spot. Upon releasing results for the first quarter ended March 31, Yum CEO Greg Creed labeled the pizza chain a detriment to the company s overall success in the period. Our strategic transformation of Yum! Brands is already well underway, helping us deliver a solid start to 2017, with core operating profit growth of 9 percent in the first quarter, Creed said in a statement. This growth was led by Taco Bell s impressive same-store sales growth of 8 percent and double-digit core operating profit growth at KFC, partially offset by weakness at Pizza Hut U.S. Pizza Hut reported 5.8 billion in U.S. systemwide sales in the Latest Year, down 0.9 percent from the Preceding Year. The brand earned the ninth overall Top 100 spot in this category both years. Domino s reprised its role in the 10th overall Top 100 spot in terms of sales, but it gained considerable ground on Pizza Hut in the Latest Year. Domino s, which notched 5.3 billion in 2016 domestic sales a nearly 11-percent rise from the Preceding Year is on track to take the Pizza segment s top spot in the near future. In January, Domino s revealed that earlier this decade, it had set an internal goal of overtaking Pizza Hut as the No. 1 pizza chain in terms of market share, said Mark Kalinowski, restaurant industry analyst for Nomura, in a report issued in May. We forecast that this transition will happen in the U.S. during 2017, with confirmation of this changeover likely by the end of springtime 2018, Kalinowski wrote. Such a change marks the end of a radical transformation in the U.S. limited-service pizza sector, where Pizza Hut has reigned supreme for decades. It s part of a long-term strategy for Domino s, which said it has completely changed how it does business, according to Tim McIntyre, Domino s executive vice president of communications, legislative affairs and investor relations. n Pizza Hut still reigns in the Pizza segment, but the chain may be losing its grip as the top dog. n No. 2 Domino s is clearly aiming to overtake Pizza Hut as the biggest chain in the segment. We don t innovate like a fast-food company, McIntyre said. That means avoiding gimmicky offers and whiz-bang temporary menu items or promotions. Everything is intended to be a permanent menu platform, said McIntyre, noting that Domino s price points are known for being static. We have had the same advertised price point since 2010, he said. It started with two medium two-topping pizzas for 5.99 each. Now it s two of anything for 5.99 each. Additional growth efforts by Domino s include getting all restaurants on a single POS system, and intensely grading franchisees and replacing inadequate ones, McIntyre said. Domino s decision to be honest with ourselves allowed it to upgrade its offerings between 2009 and The returns have been favorable: While Pizza Hut was losing market share, Domino s collected it. In the first quarter, Domino s marked its 24th consecutive quarter of positive domestic sales. The company also led the way in Estimated Sales Per Unit for the Pizza segment, with 7.7-percent growth in Competitor Pizza Hut was challenged in that regard, boosting its ESPU by a relatively small 0.6 percent. With the No. 1 and No. 2 spots spoken for in the Pizza segment, Little Caesars Pizza took home the bronze, with 3.7 billion in systemwide sales in the Latest Year. Though Little Caesars estimated U.S. sales have risen for several consecutive years, its share of Top 100 Pizza segment sales dipped from 18.2 percent in the Prior Year to 17.5 percent in the Latest Year. That share erosion came as rivals, including Domino s, Papa John s Pizza, Marco s Pizza and Round Table Pizza boosted their sales by even greater rates than Little Caesars in the Latest and Preceding Years. For the second consecutive year, Marco s Pizza put up the largest growth rates for both sales and units, at 17.1 percent and 15.4 percent, respectively. n dan.orlando@penton.com 5.8B TOTAL U.S. UNITS 24, from 24,129 a year ago SALES GROWTH LARGEST GROWTH AVERAGE 4.6 LARGEST DECLINE -0.9 ESTIMATED SALES PER UNIT LARGEST 1.6 MILLION AVERAGE 938,100 SMALLEST 583,400

37 TOP 100 Pizza SEGMENT INSIGHTS: Pizza Sales Segment totals: Latest: 20,829.2 Preceding: 20,032.0 Prior: 18,743.2 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Pizza Hut 5, , , Domino s 5, , , Little Caesars Pizza 3, , , Papa John s Pizza 2, , , Chuck E. Cheese s Papa Murphy s Take N Bake Pizza Marco s Pizza Cicis Round Table Pizza Sales Growth Segment averages: Latest: 4.59 Preceding: Marco s Pizza Domino s Round Table Pizza Papa John s Pizza Little Caesars Pizza Cicis Papa Murphy s Take N Bake Pizza Chuck E. Cheese s Pizza Hut Units Segment totals: Latest: 24,395 Preceding: 24,129 Prior: 23,780 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Pizza Hut 7,689 7,822 7, Domino s 5,371 5,200 5, Little Caesars Pizza 4,294 4,231 4, Papa John s Pizza 3,331 3,290 3, Papa Murphy s Take N Bake Pizza 1,537 1,496 1, Marco s Pizza Chuck E. Cheese s Round Table Pizza Cicis Unit Growth Segment averages: Latest: 2.01 Preceding: Marco s Pizza Domino s Papa Murphy s Take N Bake Pizza Little Caesars Pizza Papa John s Pizza Chuck E. Cheese s Round Table Pizza Pizza Hut Cicis ESPU Segment averages: Latest: Preceding: Prior: EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Chuck E. Cheese s 1, , , Cicis 1, Round Table Pizza 1, Domino s 1, Papa John s Pizza Little Caesars Pizza Pizza Hut Marco s Pizza Papa Murphy s Take N Bake Pizza ESPU Growth Segment averages: Latest: 2.25 Preceding: Domino s Round Table Pizza Cicis Papa John s Pizza Marco s Pizza Pizza Hut Chuck E. Cheese s Little Caesars Pizza Papa Murphy s Take N Bake Pizza SOURCE: NRN RESEARCH Presented by Nation s Restaurant News, MUFSO brings together the restaurant industry s top leaders, innovators, experts and change makers to reveal business insights that are laser focused on moving the restaurant industry forward. OCTOBER 1 3, 2017 HYATT REGENCY REUNION DALLAS, TX REGISTER NOW AT MUFSO.COM

38 TOP 100 Chicken Chicken booms as chains put focus on quality Raising Cane s races ahead while KFC sees turnaround results BY BRET THORN CHICKEN BY THE NUMBERS TOTAL U.S. SALES: 21.9B 10.0 FROM 19.9B A YEAR AGO SEGMENT SALES LEADER It was a good year for Chicken chains, with sales rising on average nearly 8.8 percent. Although Boston Market and Church s Chicken saw declines, the other eight chicken chains in the Top 100 enjoyed robust growth. Raising Cane s Chicken Fingers again led the pack in terms of growth. The chain s limited menu of chicken fingers, Texas toast, fries, coleslaw and dipping sauce has shown that not doing very much, but doing it very well, can be the key to success. The Baton Rouge, La.-based chain posted growth in estimated sales just shy of 26 percent the fastest growth among all Top 100 chains with 59 net new units by the end of 2016, for a 23.5-percent increase in total units. The segment s 800-pound gorilla, Atlanta-based Chick-fil-A, saw sales grow more than 1.1 billion, rising 16.9 percent, as it opened a net 118 units, increasing its overall restaurant count by 6 percent. Chick-fil-A public relations manager Amanda Hannah attributed the chain s nearly half-century of success it s had 49 consecutive years of sales growth to late founder S. Truett Cathy s commitment to community and quality. Hannah also noted that the chain made some important innovations in Those included the new Chickfil-A One app that allows customers to order ahead of time, bypass the line and earn treats. The chain also replaced coleslaw with a Superfood Side a blend of broccolini, kale, maple vinaigrette, dried sour cherries and roasted nuts. It introduced healthful options such as a Spicy Southwest Salad and an Egg White Grill grilled chicken breast, egg whites and American cheese on an English muffin. For more indulgent occasions, the chain riffed on Frosted Lemonade, which blends lemonade with soft serve, with Frosted Coffee. Although Chick-fil-A grew the most in dollar terms, from a percentage perspective it was outstripped by Raising Cane s and Wingstop, the latter of which saw 16.9-percent sales growth. Richardson, Texas-based Wingstop n Raising Cane s not only set the pace for sales growth among Chicken chains, but also was the fastest-growing chain in the Top 100. n Chick-fil-A continued its segment sales supremacy as KFC began to see returns on its recolonelization initiative. also opened a net 136 locations, for a 17.3-percent in total restaurant count. Zaxby s, Popeyes Louisiana Kitchen, Bogangles Famous Chicken n Biscuits and El Pollo Loco reported sales growth ranging from 5.6 percent to 13.3 percent. KFC continued a turnaround and grew sales by 3.6 percent in the Latest Year, compared with 1.9 percent the Preceding Year, even as it closed a net 2.4 percent of domestic restaurants, decreasing the chain s U.S. unit count by 103 units, to 4,167 locations. The subsidiary of Louisville, Ky.- based Yum! Brands Inc. has been undergoing what management calls a recolonelization, or a return to the high standards of founder Colonel Harland Sanders and bringing the iconic colonel back to the forefront in a series of marketing campaigns featuring entertainers from George Hamilton to Rob Riggle portraying different versions of the founder. KFC U.S. president Kevin Hochman said recolonelization has entailed more than 100,000 hours of training. Managers attended training rallies across the country and were sent back to retrain staff and recalibrate equipment. The effort was supported by a 13-week advertising campaign. Yum also spent 80 million on equipment for integrated prep lines that has improved efficiency and paved the way for the launch this year of the Zinger, a fried chicken sandwich that has been popular in international markets. KFC also explored regional cuisines last year with the launch of Nashville Hot Chicken and the test and subsequent rollout of honey-mustard Georgia Gold fried chicken. The chain remodeled around 250 locations by the end of 2016, resulting in mid-single-digit to high-single-digit improvements in customer scores in the categories of appearance, cleanliness, taste and speed. n bret.thorn@penton.com 7.9B TOTAL U.S. UNITS 13, from 12,651 a year ago SALES GROWTH LARGEST GROWTH AVERAGE 8.8 LARGEST DECLINE -4.4 ESTIMATED SALES PER UNIT LARGEST 3.9 MILLION AVERAGE 1.8 MILLION SMALLEST 727,200

39 TOP 100 Chicken SEGMENT INSIGHTS: Chicken Sales Segment totals: Latest: 21,888.7 Preceding: 19,892.0 Prior: 17,938.5 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Chick-fil-A 7, , , KFC 4, , , Popeyes Louisiana Kitchen 2, , , Zaxby s 1, , , Bojangles Famous Chicken n Biscuits 1, , , Wingstop Church s Chicken El Pollo Loco Raising Cane s Chicken Fingers Boston Market Units Segment totals: Latest: 13,057 Preceding: 12,651 Prior: 12,333 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 KFC 4,167 4,270 4, Chick-fil-A 2,085 1,967 1, Popeyes Louisiana Kitchen 2,067 1,970 1, Church s Chicken 1,070 1,131 1, Wingstop Zaxby s Bojangles Famous Chicken n Biscuits Boston Market El Pollo Loco Raising Cane s Chicken Fingers ESPU Segment averages: Latest: 1,752.2 Preceding: 1,698.4 Prior: 1,619.5 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Chick-fil-A 3, , , Raising Cane s Chicken Fingers 2, , , Zaxby s 2, , , Bojangles Famous Chicken n Biscuits 1, , , El Pollo Loco 1, , , Popeyes Louisiana Kitchen 1, , , Boston Market 1, , , Wingstop 1, , , KFC 1, Church s Chicken Sales Growth Segment averages: Latest: 8.77 Preceding: Raising Cane s Chicken Fingers Wingstop Chick-fil-A Zaxby s Popeyes Louisiana Kitchen Bojangles Famous Chicken n Biscuits El Pollo Loco KFC Boston Market Church s Chicken Unit Growth Segment averages: Latest: 6.94 Preceding: Raising Cane s Chicken Fingers Wingstop Zaxby s Bojangles Famous Chicken n Biscuits El Pollo Loco Chick-fil-A Popeyes Louisiana Kitchen Boston Market KFC Church s Chicken ESPU Growth Segment averages: Latest: 2.04 Preceding: Chick-fil-A KFC Raising Cane s Chicken Fingers Zaxby s Popeyes Louisiana Kitchen El Pollo Loco Church s Chicken Wingstop Bojangles Famous Chicken n Biscuits Boston Market SOURCE: NRN RESEARCH Presented by Nation s Restaurant News, MUFSO brings together the restaurant industry s top leaders, innovators, experts and change makers to reveal business insights that are laser focused on moving the restaurant industry forward. OCTOBER 1 3, 2017 HYATT REGENCY REUNION DALLAS, TX REGISTER NOW AT MUFSO.COM

40 TOP 100 Family Dining Family-Dining brands look for solid footing A boost in off-premise dining helps Cracker Barrel lead in sales growth BY BRET THORN FAMILY DINING BY THE NUMBERS TOTAL U.S. SALES: 13.15B -0.2 FROM 13.18B A YEAR AGO SEGMENT SALES LEADER It was a tough year for Family-Dining restaurants, with most chains posting declines in domestic annual sales. That included the top grossing chain, IHOP, which saw estimated sales dip 0.8 percent, to 3.1 billion, despite opening a net 33 units the most new restaurants in the segment. Golden Corral, Bob Evans Restaurants and Perkins Restaurant & Bakery all continued to close units, as they did in the Preceding Year, and Estimated Sales Per Unit also shrank at those chains. Cracker Barrel Old Country Store was the top-performing Family-Dining chain, with a nearly 2.5-percent increase in sales overall, buoyed by a 1.8-percent increase in estimated sales per unit. Don Hoffman, Cracker Barrel s senior vice president of marketing, pointed to the chain s value proposition, as well as consistency and warm service, as the keys to its success, although a boost in off-premise dining helped, too. We are committed to hiring people who understand what goes into serving others, Hoffman wrote in an . And once on the job, we provide them with the opportunity to grow their skills and grow with our company. Our people are our greatest asset. But the chain has also responded to the changing demographics of customers and the growing interest of consumers in eating at home. In November 2016, Cracker Barrel introduced a Heat n Serve offering for Thanksgiving and Christmas, allowing customers to pre-order holiday meals for up to 10 people to eat at home. It was successful enough that the chain also offered it during Easter. Hoffman said the chain was also evolving its marketing strategies to reach a broader audience. Through investments in our music and entertainment program, our social media platforms and other initiatives, we continue to find new and innovative ways to reach a younger and more diverse audience, he said. Hoffman added that the chain is currently testing new catering platforms and online ordering. Meanwhile, Waffle House continued to plug along, with a 1.8-percent increase in estimated sales. n Family-Dining growth leader Cracker Barrel bulked up its eat-at-home holiday meal options. n Denny s improved more than 77 percent of the menu since 2010, adding items like USDA Select Beef and gluten-free English muffins. Denny s also had a decent year, with 1.7-percent growth in sales and a 1.2-percent increase in Estimated Sales Per Unit. The chain continued an ongoing menu revamp in 2016, improving core items such as pancakes, which it upgraded with real eggs, vanilla and buttermilk. To support the launch Denny s introduced several limited-time pancake meals with toppings such as cinnamon sauce with cream cheese icing, and chocolate chips with peanut sauce along with a media campaign promoting the new item as a replacement for those made by beloved family members. Geo-targeted Snapchat filters and a new episode of Denny s animated web series, The Grand Slams, rolled out. When we launched an entirely new recipe for pancakes, it wasn t because our guests thought our old recipe was bad, Denny s chief marketing officer John Dillon wrote in an . In fact, our guests already thought our pancakes were good. However, if we were going to deliver on our quality and value promise, we felt we owed it to our guests to make them even better. The chain has improved more than 77 percent of the menu since 2010, Dillon said, with nearly half of that accomplished in the past three years. That includes upgrades such as Alaska salmon, USDA Select beef, seven-grain bread and freshly cut seasonal fruit and vegetables. The chain also has introduced gluten-free English muffins, turkey bacon and chicken sausage. We ve also been incredibly strategic, and have successfully reduced our total number of menu items, Dillon added, enabling our operators greater focus and execution for our guests. Denny s has additionally continued the Heritage remodeling program that reinforces the brand s image as America s diner, and has reportedly resulted in same-store sales increases in the mid-single digits. Dillon said more than half of the chain s locations had completed the remodel as of the end of n bret.thorn@penton.com 3.1B TOTAL U.S. UNITS 7, from 7,128 a year ago SALES GROWTH LARGEST GROWTH +2.5 AVERAGE -1.1 LARGEST DECLINE -8.0 ESTIMATED SALES PER UNIT LARGEST 4.6 MILLION AVERAGE 2.2 MILLION SMALLEST 653,100

41 TOP 100 Family Dining SEGMENT INSIGHTS: Family Dining Sales Segment totals: Latest: 13,154.7 Preceding: 13,177.8 Prior: 12,608.3 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 IHOP 3, , , Cracker Barrel Old Country Store 2, , , Denny s 2, , , Golden Corral 1, , , Waffle House 1, , , Bob Evans Restaurants Perkins Restaurant & Bakery Units Segment totals: Latest: 7,172 Preceding: 7,128 Prior: 7,104 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Waffle House 1,905 1,891 1, IHOP 1,637 1,604 1, Denny s 1,610 1,599 1, Cracker Barrel Old Country Store Bob Evans Restaurants Golden Corral Perkins Restaurant & Bakery ESPU Segment averages: Latest: 2,235.1 Preceding: 2,242.4 Prior: 2,164.8 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Cracker Barrel Old Country Store 4, , , Golden Corral 3, , , IHOP 1, , , Bob Evans Restaurants 1, , , Denny s 1, , , Perkins Restaurant & Bakery 1, , , Waffle House Sales Growth Segment averages: Latest: Preceding: Cracker Barrel Old Country Store Waffle House Denny s IHOP Perkins Restaurant & Bakery Golden Corral Bob Evans Restaurants Unit Growth Segment averages: Latest: 0.01 Preceding: IHOP Waffle House Denny s Cracker Barrel Old Country Store Golden Corral Bob Evans Restaurants Perkins Restaurant & Bakery ESPU Growth Segment averages: Latest: Preceding: Cracker Barrel Old Country Store Denny s Waffle House Perkins Restaurant & Bakery Golden Corral IHOP Bob Evans Restaurants SOURCE: NRN RESEARCH Presented by Nation s Restaurant News, MUFSO brings together the restaurant industry s top leaders, innovators, experts and change makers to reveal business insights that are laser focused on moving the restaurant industry forward. OCTOBER 1 3, 2017 HYATT REGENCY REUNION DALLAS, TX REGISTER NOW AT MUFSO.COM

42 TOP 100 Segment Snapshot: C-Store C-Stores: An appetite for acquisitions After years of encroaching on conventional restaurant sales with expanded foodservice programs, the two largest footprint Top 100 C-Store chains may soon get a boost from the super-sized acquisition appetites of their parent companies. Alimentation Couche-Tard Inc., parent Circle K, the second-largest Top 100 C-Store chain by unit count, at press time was working to complete a 4.4 billion acquisition of publicly traded CST Brands Inc. CST ended its Latest Year with 1,167 company C-stores in the United States primarily under the Corner Store, Nice N Easy and Flash Foods brands and 884 company C-store or fuel sites in Canada. In March 2015, Alimentation Couche-Tard acquired The Pantry Inc., an approximately 1,500-unit C-store system that operated in the Southeastern U.S., primarily under the Kangaroo Express banner. Meanwhile, 7-Eleven Inc., immediate parent to 7-Eleven which leads the C-Store segment with 2.5 billion in sales and 7,904 units in April agreed to acquire for 3.3 billion from Sunoco L.P. approximately 1,108 C-stores in the United States. The deal is expected to close by 2017 s fourth quarter and involves more than 740 Stripes C-stores, most of which enjoy relatively high foodservice sales from proprietary in-store Laredo Taco Co. restaurants. The effect of the acquisitions on the 7-Eleven and Circle K chains is not immediately clear, as it will depend on how many of the acquired stores are converted to those brands and whether the acquired concepts have products, systems or strategies that can be adapted by their larger siblings. For instance, Circle K got little apparent benefit from The Pantry acquisition in the year after that deal was done, but in the chain s Latest Year, ended in April, based on company reports, NRN estimated Circle K would see a net gain of 400 new U.S. company stores, to 3,740, with nearly all of those additions linked to converted Kangaroo Express or other acquired locations. The Top 100 C-Store segment continued to drive sales in the Latest Year, with an average foodservice sales growth rate of 7.3 percent, compared with a 4 percent average among all Top 100 chains. The results come as C-store foodservice fares better than the prepared food-and-beverage business in other retail settings, such as grocery and drug stores, according to NPD Group research. NPD said while overall retail foodservice traffic was flat in 2016, C-store visits were up 1 percent for the year, compared with a 3-percent increase a year earlier. Alan J. Liddle C-STORE BY THE NUMBERS TOTAL U.S. SALES: 6.9B 6.2 FROM 6.5B A YEAR AGO SEGMENT SALES LEADER 2.5B TOTAL U.S. UNITS 15, FROM 14,822 A YEAR AGO AVERAGE SALES GROWTH: 7.3 AVERAGE ESPU: 971,300 Sales Segment totals: Latest: 6,863.5 Preceding: 6,460.0 Prior: 5,863.4 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR Eleven 2, , , Wawa 1, , , Casey s General Store Circle K Sheetz Units Segment totals: Latest: 15,404 Preceding: 14,822 Prior: 14,618 YEAR-END NUMBER OF UNITS LATEST PRIOR Eleven 7,904 7,825 7, Circle K 4,240 3,842 3, Casey s General Store 1,979 1,931 1, Wawa Sheetz ESPU Segment averages: Latest: Preceding: Prior: EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Wawa 2, , , Sheetz 1, , , Casey s General Store Eleven Circle K Sales Growth Segment averages: Latest: 7.25 Preceding: Wawa Casey s General Store Sheetz Circle K Eleven Unit Growth Segment averages: Latest: 4.71 Preceding: Circle K Sheetz Wawa Casey s General Store Eleven ESPU Growth Segment averages: Latest: 3.17 Preceding: Casey s General Store Wawa Sheetz Circle K Eleven SOURCE: NRN RESEARCH

43 TOP 100 Segment Snapshot: Bakery-Cafe Panera Bread leads strong category Mergers and acquisitions are becoming a powerful factor in the Bakery-Cafe segment, one of the Top 100 s best-performing segments. Among the 12 segments in the Top 100, the Bakery-Cafe group made up of Einstein Bros. Bagels, Panera Bread Co. and Tim Hortons had highest average growth in Latest-Year Estimated Sales Per Unit, or ESPU, at 7.0 percent. The segment s Latest-Year 7.0-percent growth in aggregate segment sales was bettered only by Beverage-Snack (10.4 percent), Chicken (10 percent) and Limited Service/Specialty (9.7 percent). The pending acquisition of segment sales leader Panera Bread Co. by JAB Holding Co. of Germany for 7.5 billion, a move that will take the company private, positions the Panera Bread chain for growth, experts say. Now that they are private, they can play for longterm returns, restaurant industry researcher and analyst Malcolm M. Knapp said. All the pieces are in place. Panera decided to go all out and own healthy foods and that, along with [design] changes in the stores and bringing in the technology piece [for loyalty and guest self-service], has taken three years, but now they re reaping the rewards, he added. Panera s delivery-catering initiatives, including development of hub production facilities, may quicken its sales-building march, industry watchers note. JAB previously took Einstein Bros. Bagels parent Einstein Noah Restaurant Group Inc. private in November Einstein Bros. Bagels officials said two key drivers behind Latest-Year performance were strong growth coming from the catering channel and product-innovation efforts, including the launch of sandwiches with fresh eggs. The chain also increased the pace at which it remodeled stores and added sister concept Caribou Coffee products to reposition the locations as Coffee & Bagels stores. Tim Hortons led all Top 100 chains not just its Bakery-Cafe peers in Latest- and Preceding-Year growth in ESPU, at 14.9 percent and 17.5 percent, respectively. That improvement, in large part, was linked to Tim Hortons change in ownership to Restaurant Brands International in December Under that new parent, Tim Hortons management likely culled some underperforming conventional restaurants along with 46 non-standard shop/kiosk operations in 2015 when it terminated agreements for 172 U.S. locations or 19.5-percent of the Prior Year s total franchised unit count. Alan J. Liddle BAKERY-CAFE BY THE NUMBERS TOTAL U.S. SALES: 6.3B 7.0 FROM 5.8B A YEAR AGO SEGMENT SALES LEADER 4.9B TOTAL U.S. UNITS 3, FROM 3,353 A YEAR AGO AVERAGE SALES GROWTH: 5.9 AVERAGE ESPU: 1.4M Sales Segment totals: Latest: 6,257.9 Preceding: 5,849.1 Prior: 5,408.4 U.S. SYSTEMWIDE SALES ( in millions) LATEST PRIOR 1 1 Panera Bread 4, , , Tim Hortons Einstein Bros. Bagels Sales Growth Segment averages: Latest: 5.87 Preceding: Tim Hortons Panera Bread Einstein Bros. Bagels Units Segment totals: Latest: 3,469 Preceding: 3,353 Prior: 3,401 YEAR-END NUMBER OF UNITS LATEST PRIOR 1 1 Panera Bread 1,956 1,860 1, Tim Hortons Einstein Bros. Bagels Unit Growth Segment averages: Latest: 2.59 Preceding: Panera Bread Tim Hortons Einstein Bros. Bagels ESPU Segment averages: Latest: 1,446.8 Preceding: 1,377.3 Prior: 1,305.0 EST. SALES PER UNIT ( in thousands) LATEST PRIOR 1 1 Panera Bread 2, , , Tim Hortons 1, Einstein Bros. Bagels ESPU Growth Segment averages: Latest: 7.03 Preceding: Tim Hortons Einstein Bros. Bagels Panera Bread SOURCE: NRN RESEARCH