This report looks at the operational risk associated with this industry. Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk).
At industry businesses, patrons pay before eating. Purchases may be consumed on-site, taken out or delivered. Some establishments also sell alcohol. Gross sales come from franchises and company-owned stores. Officially reported SEC company revenue (net revenue) refers to revenue obtained only from company-owned stores and franchise fees. Franchised stores' gross sales revenue is not available to the franchisor. Net revenue is therefore always less than gross revenue.
The primary activities of firms in this industry are:
- Operating drive-thru and take-out facilities
- Operating fast-food services
- Operating quick-service restaurants