Published: Friday, November 27, 2020
McDonald's and Subway are two of the world's largest international fast food restaurant chains. Each company possesses astrong brand and is an established name inthe casualeating restaurant industry.With 40,953 locations worldwide, Subway beats outMcDonald's as the largest global chain. McDonald's currently has 37,855 locations globally. So, what'sbehind this difference in global positioning? And, are the differences meaningful beyond a number of restaurants?
Ownership Structure
The most important general difference between the two companies is that McDonald's is a public company while Subway is privately owned. The common stock of McDonald's is listed on the New York Stock Exchangeand it hasbeenincluded in the Dow Jones Industrial Average (DJIA) since 1985 due to its market capitalization and its position in theindustry. In contrast, Subway is owned and operated by theprivate company Doctors' Associates Incorporated.
The McDonald's brand is much more valuable than that of Subway despite both companies ranked among the world's most valuable brands, according to Forbes, up to 2018, when Subway was dropped from the list. Regular, open publication of the company's financials improves itsaccess to capital which, in turn, provides more opportunities to strengthen the company's brand, a key factorbehind its continued strongfinancial results. So, it seems that brand value alone does not explain the difference between the chain size of the two companies.
Investment and Capital Resources
For established companies such as McDonald's and Subway, franchising is one way to expand rapidly with minimal risk to the parent company. Both companies use franchising in their business models but to different extents. AllSubway stores are franchised.The company itself does not own any Subway restaurants. McDonald's owns about 20%of its restaurants, with the remaining80% owned and operated by independent franchisees.
Expertise gained from operating company-owned outlets enables parent companiesto improve the operating standards of the whole franchise chain. At the same time, the existenceof company-owned stores in McDonald's business structure places certain restrictions on its expansion capabilities. For example, aconventional franchise agreement supposes that the parent company owns the land and the building or secures long-term leases for its restaurants. This requires more capital, which can limittheability for expansion at the rate of other chains, like Subway.
Fee Structures
We have already discussed that thebusiness models of both companies are focused on franchising. A franchise license is an authorization granted by a company to an individual that enables the franchiseeto maintain control over purchasing, employment, pricing, and marketing decisions. To securea franchise license, the franchisee pays a set of fees to the parent company. Thefranchise fees to open a new McDonald's restaurant are much greaterthan that of a Subway restaurant. Thetotal investment needed to open a new McDonald's restaurant ranges from $1,215,000 to $1,945,000 plus an initial fee of $45,000, while theopening costs of a new Subway range from $116,000 to $263,000 withaninitial fee of $15,000. Thus, Subway is much more affordable for small entrepreneurs.
Geographic Segments
While the preceding factors speak to why the number of Subway locations exceeds that of McDonald's, the datareveals thatMcDonald's, with stores in 113 countries, has a broader geographic representation than Subway, which has stores in107 countries. In addition, insome countries, the number of McDonald's restaurants exceeds that ofSubway, particularly in China and Japan as well as Europe andSouth America. Subway, in turn, dominates in Australia, India, and the United Kingdom as well asNorth and Central America. The United States is the single largest market segment for both companies.
FAQs
Is Subway or McDonald's bigger? ›
McDonald's and Subway are two of the world's largest international fast food restaurant chains. Each company possesses a strong brand and is an established name in the casual eating restaurant industry. With 40,953 locations worldwide, Subway beats out McDonald's as the largest global chain.
Is Subway the world's largest restaurant chain? ›Surprisingly enough, Subway has the most number of outlets in the entire world. Subway is the biggest restaurant chain in the world and is growing its business by focusing on its sandwich.
What is the largest fast food chain in the world 2022? ›McDonald's. McDonald's is the largest quick-service restaurant brand worldwide. The company, whose logo with the golden arches is recognizable around the world, has been dominating the fast-food scene for many decades.
What is the largest fast food chain in the world? ›The largest fast food chain in the US is McDonald's, with a revenue of $23.223 billion and a market share of 43.8%. As of 2021, the US fast food industry has a market size of $296.6 billion. 36.6% of Americans consume fast food every day.
What is the most popular fast-food restaurant? ›McDonald's is by far the most popular fast food chain in the United States. It has about 13,500 locations in the U.S., 40,000 worldwide, and it operates in 118 countries.
What is the number 1 restaurant chain in the world? ›| Rank | Fast Food Chain | Number of Stores |
|---|---|---|
| 1 | McDonald's | 37,855 |
| 2 | Starbucks | 28,218 |
| 3 | Chipotle Mexican Grill | 2,622 |
| 4 | Yum! Brands | 43,617 |
| Year | 1st | 2nd |
|---|---|---|
| 2016 | Osteria Francescana | El Celler de Can Roca |
| 2017 | Eleven Madison Park | Osteria Francescana |
| 2018 | Osteria Francescana | El Celler de Can Roca |
| 2019 | Mirazur | Noma |
What fast food makes the most money? ›
The Top 10 Fast-Food Restaurants by Sales in America
McDonald's: $37 billion in system-wide U.S. sales. Starbucks: $13 billion in system-wide U.S. sales. Subway: $10.8 billion in system-wide U.S. sales.
Chick-fil-A ranks as America's favorite restaurant, again.
What state has the most fast food? ›Coming in at the number one spot is Alabama, which has 6.3 fast food restaurants per every 10,000 residents. That's nearly a full point higher than the second place state, Nebraska, which has 5.4 fast food restaurants per 10,000 people. Above, you can see the complete ranking.
What is the No 1 fast-food in America? ›Ever since the McDonald brothers created the concept of fast food in 1940, the restaurant's golden arches have continued to beckon customers to its quick, cheap, and tasty meals. McDonald's is still the most popular fast food brand in America today—with $46 billion in systemwide sales last year.
What is the healthiest fast-food place? ›- Chipotle. Chipotle Mexican Grill is a restaurant chain that specializes in foods like tacos and burritos. ...
- Chick-fil-A. Chick-fil-A is a fast-food restaurant that specializes in chicken sandwiches. ...
- Wendy's. ...
- McDonald's. ...
- Ruby Tuesday. ...
- The Cheesecake Factory. ...
- KFC. ...
- Subway.
The Walrus and the Carpenter — Seattle, Washington.
What is the largest restaurant company in the US? ›| # | Name | M. Cap |
|---|---|---|
| 1 | McDonald 1MCD | $196.95 B |
| 2 | Chipotle Mexican Grill 2CMG | $40.23 B |
| 3 | Yum! Brands 3YUM | $36.45 B |
| 4 | Restaurant Brands International 4QSR | $29.36 B |
What is the 2 most popular fast food restaurant? ›
Alain Ducasse, 21 Michelin Stars
Alain Ducasse may easily be the most successful among the world's top 10 chefs. This is what he managed to achieve: Earned his 21 Michelin stars and kept them throughout his career.
- New York City, New York.
- Chicago, Illinois.
- San Francisco, California.
- Houston, Texas.
- Charleston, South Carolina.
- Seattle, Washington.
- Portland, Oregon.
- Philadelphia, PA.
Subway is the most famous sandwich chain in America, and it was founded by Peter Buck and Fred DeLuca in 1965. Not only is it popular in America, but it's one of the largest fast food chains in the world, with over 42,000 locations globally.
What restaurant has the largest menu in the US? ›Or maybe instructions on how to safely store plutonium. But the 21-page, 250-item tome -- as you probably know -- is the Cheesecake Factory's standard menu.
Who is the largest foodservice company? ›The three largest food and beverage companies for 2021 in the U.S. are PepsiCo., Tyson Foods, and Nestle. That's according to our annual reporting of the top food & beverage companies in North America.
Is Subway richer than Mcdonalds? ›Subway had 33,749 restaurants worldwide at the end of last year, according to company reports, and McDonald's Corp. had 32,737. McDonald's still leads in revenue, $24 billion last year to Subway's $15.2 billion.
Is Subway bigger than McDonald's 2022? ›In the US, there are 24,568 Subways compared to 13,793 McDonald's locations.
Who makes more Chick Fil A or McDonald's? ›Chick-fil-A Makes More Per Restaurant Than McDonald's, Starbucks and Subway Combined … and It's Closed on Sundays. Why a restaurant that's closed on Sundays makes more per restaurant than any other fast food restaurant in the country.
What food job pays the most? ›- Food Service Manager. If you work as a food service manager, you will be responsible for providing guidance and leadership in hotels, restaurants, cafes, and other food operating industries. ...
- Executive Chef. ...
- Private Chef. ...
- Culinary Operations Director. ...
- Food And Beverage Director.
What's the easiest fast food place to work for? ›
- Starbucks.
- Chick-Fil-A.
- In-N-Out Burger.
- Chipotle.
- Shake Shack.
- Five Guys Burgers and Fries.
- Taco Bell.
- Panda Express.
- Flavorist. Salary range: $80,000-$150,000 per year. ...
- Food Safety Director. Salary range: $44,500-$110,000 per year. ...
- Refrigeration Engineer. ...
- Food Scientist. ...
- Food Safety Manager. ...
- Refrigeration Service Technician. ...
- Food Safety Specialist. ...
- Ingredient Specialist.
| OCCUPATION | 2021 MEDIAN PAY |
|---|---|
| General internal medicine physicians | This wage is equal to or greater than $208,000 per year |
| Family medicine physicians | This wage is equal to or greater than $208,000 per year |
| Emergency medicine physicians | This wage is equal to or greater than $208,000 per year |
(CNN) - Chick-fil-A remains the head of the pack not only in the fast food industry, but of all restaurants when it comes to customer service satisfaction.
How much do McDonald's employees make in America? ›Average McDonald's hourly pay ranges from approximately $8.50 per hour for Lead Teacher to $22.88 per hour for Loader. The average McDonald's salary ranges from approximately $18,000 per year for Collector to $163,530 per year for Supply Chain Specialist.
Who makes more money Subway or McDonald's? ›| Restaurant | Sales (2017 Total U.S. Sales) | Number of U.S. Franchises |
|---|---|---|
| McDonald's | $37,480,670,000 | 14,036 |
| Starbucks | $13,167,610,000 | 13,930 |
| Subway | $10,800,000,000 | 25,908 |
| Burger King | $10,028,320,000 | 7,226 |
Subway has the most number of locations with 20,799 locations across 54 states and territories. Mary's Gone Crackers has 18,278 and McDonald's has 13,266 locations in the US.
Who is Subway biggest competitors? ›...
- McDonald's.
- KFC.
- Burger King.
- Wendy's.
- Starbucks.
- Dunkin' Donuts.
- Arby's.
- Jimmy John's.
The sandwich chain surpassed the world's largest hamburger chain in terms of number of stores in the U.S. in 2002 and now it has taken the global lead. Subway had 33,749 restaurants worldwide at the end of last year, according to the company. McDonald's Corp. had 32,737, according a regulatory filing.
What is healthier Subway or McDonald's? ›Looking at the overall meal, the Subway meal in terms of protein and sugar was slightly healthier than McDonald's and provided more vegetables, however it was higher in sodium. Remember both meals contributed the same total number of calories but on top of that, it was a large amount of calories.
What is the richest fast food chain? ›
...
Overall Rating.
| Overall Rating | 3.5 | 3.6 |
|---|---|---|
| Work/life balance | 3.4 | 3.5 |
| Compensation and benefits | 2.9 | 2.7 |
| Job security and advancement | 3.2 | 3.0 |
| Management | 3.2 | 3.2 |
What's more, Montpelier is the smallest state capital in terms of population, with only about 7,500 people. In addition to being on the small side, Montpelier tends to favor local businesses over large chains, so McDonald's shouldn't take it personally. The city doesn't have a Burger King either.
What state eats the most McDonald's? ›- Pennsylvania. ...
- Michigan. Number of McDonald's: 631. ...
- Illinois. Number of McDonald's: 738. ...
- New York. Number of McDonald's: 767. ...
- Ohio. Number of McDonald's: 822. ...
- Florida. Number of McDonald's: 986. ...
- Texas. Number of McDonald's: 1225. ...
- 1. California. Number of McDonald's: 1492.