Quick service restaurants (QSRs) are all around us. Toasttab reports that 37% of U. S. adults consume fast food daily. In 2022, the market length grew to more than 362 billion according to IBIS World. QSRs, like Chipotle, are experiencing virtual sales increasing by more than 216%, driven in part by the pandemic. As the industry evolves, so does the business model, which is an exciting opportunity for investors.
As CNN reports, every day, about 84. 8 million Americans consume fast food. From 2017 to 2022, QSR’s market share increased by 3%. In addition, quick-service restaurants account for 50% of the restaurant sector’s sales.
While most of us know them as fast food restaurants, the industry calls them quick service restaurants, or QSRs. While there are many QSRs, they have several things in common. They are known for their quick installations and limited menus. They offer fast food. Direct service and takeaway without waiters. Their menu features charge between $1 and $10. We know them under brands like McDonald’s, Wendy’s, and KFC.
Most of us will never have the desire, time, or budget to operate a fast food restaurant, but they can still be part of your investment portfolio. Most people are familiar with budgeting for each other, but there are also budgets for quick-service restaurants. There are alternative/accredited investment corporations that specialize in QSR. They have a tendency to create a portfolio of similar QSRs in a given area. These budgets tend to acquire and improve individual franchise locations. By replicating what was a success somewhere else, they achieve more success. The more spots you fill, the less the threat of competition, which is another way that budget generates more profits. For reference, most small “family” homeowners don’t have the capital to renovate and modernize restaurants, especially as many go digital. Each of us has visited an “old” QSR and seen it. QSR’s budget can pool the resources of its investors and improve individual venues.
Budgets for quick-service restaurants are also for existing franchise owners looking to retire. Most franchisors have regulations related to sales. Often, the franchisor will stand behind owners who already own their franchise logo, the more the better, as it is a testament to good luck within the logo. Selling a franchise to a QSR fund that already owns your logo increases the chances that the sale will be approved. This allows the QSR budget to buy more at higher prices, which is a credit to investors.
The biggest problem with Quick Service Restaurant’s budget is that they are not liquid. Each fund will have its own regulations and conditions, but in general they are not liquid and there is a threat of wasting an entire investment. These budgets do not offer any guarantee of investment or rate of return. For those reasons, if you’re contemplating incorporating the QSR budget into your chosen investment portfolio, they only make up a small portion of your investable assets.
Own QSR for everyone. But it’s an investment of choice, a far cry from classic stocks and bonds that would arguably be more recession-resistant.
Frederick Hubler is the founder and CEO of Creative Capital Wealth Management Group, a fee-based wealth strategy firm specializing in election methods in Chester County, Pennsylvania.
Securities filed through Arkadios Capital, LLC (member FINRA and SIPC).
Past functionality is not a guarantee or indication of long-term results. This summary of statistics, values and quotes was obtained from sources believed to be reliable, but is not necessarily complete and cannot be guaranteed. All securities would possibly lose value, may not be insured through any federal agency, and are subject to availability and value replacements. The market threat will need to be taken into account in the event of a sale before expiration. The data and revisions contained herein are for general data use only and are subject to replace without notice.