Independent Restaurants

Part
01
of four
Part
01

Independent Restaurants - Pizza

In 2017, there were 41,728 independent pizza shops operating in the United States, and they generated an average sales revenue of $443,257.85 per store or $18.5 billion as a whole. More information on the topic has been presented below.

OVERALL INDUSTRY INFORMATION

The key trends around the pizzeria industry in North America are the increase in healthier options, the increasing consciousness on environmental impact, the change from "fast food" restaurant to "fast casual" focus, and the adoption of technology. However, one of the significant trends in the pizza market is the increasing use of organic products and allergy-free ingredients.

In 2017, the pizza segment was named as the fastest growing segment in fast-casual restaurants while Blaze Pizza was named as the fastest-growing pizza chain. In the US, the states with the highest number of pizza shops per capita are New Hampshire, Iowa, and Pennsylvania. Also, the top pizzeria chain in 2017 in the US was Domino's.

NUMBER OF Pizza SHOPS

According to Pizza Power's latest report released in 2018, the total number of Pizzerias in the US in 2017 was 75,243. This figure has continued to fluctuate year-over-year within the last seven years. There were a total of 71,856 pizza shops in 2012, then it dropped to 71,387 in 2013. It increased to 73,097 in 2014, followed by another increase to 74,812 and 76,723 in 2015 and 2016 respectively. This figure saw a drop to 75,243 in 2017 and finally, an increase to 76,993 in 2018.
According to the same report by CHD Expert, there were 41,728 independent pizzerias in the US and 33,515 chain pizzerias in operation in 2017.
From a total of 4,992 pizzerias that opened in the US in 2017, 2,868 were independent shops and from a total of 5,291 pizzerias that closed in the US in 2017, 4,121 were independent shops.

REVENUE PER PIZZA SHOP

The average revenue generated in sales per pizzeria in 2017 was $745,557.33 per chain unit and $443,257.85 per independent shop. The average revenue that each pizza shop generated in 2017 in the US was $577,909.14. The average revenue per chain pizzeria unit is 70% higher than the independent pizza shops.

REVENUE GENERATED AS A WHOLE

The total value of the pizzeria industry in the US is $45.1 billion and of this market size, independent pizza shops represented 41% in 2017 while pizza chains took 58.9%. The revenue generated by independent pizza shops in the US as a whole was $18.5 billion in 2017 while pizza chains accounted for $26.6 billion of the total revenue in the US in 2017.
Part
02
of four
Part
02

Independent Restaurants - Chinese

There are approximately 24,087 independent Chinese restaurants in the US generating about $10.667 billion per year.

METHODOLOGY

We began our search by looking for the number of independent Chinese restaurants on industry related websites such as RestaurantBusinessOnline and GrubStreet. While we did not find the exact number of independent restaurants, we found that the total number of Chinese restaurants as of 2017 was 50,000, and a majority of them are not large chain restaurants but small family-owned restaurants.
We then tried to look for this information in trusted media sites such as Forbes, New York Times and Washington Post, hoping to find articles on the number of the Chinese restaurants in the US. While we did not find any data on the number of independently owned Chinese restaurants, we found out that there are more Chinese restaurants in the US than McDonald's, Burger King, Wendy's and KFC combined.
Next, we scoured surveys and reports on the Chinese restaurant industry hoping to find the market size and revenue of independent Chinese Restaurants. While not many of such surveys were available, we were able to find one by IBIS World on the Chinese restaurant industry. Unfortunately, the data therein was hidden behind a paywall.
Lastly, we tried to expand the scope of the assignment to Asian cuisine, hoping to find the market share of the Chinese restaurants within it. We found out that Asian food is the fastest-growing cuisine in the US. In a report by the CHD, we also found out that as of June 2018, there were more than 70,000 Asian restaurants in the US. Chinese cuisine is by far the most popular Asian cuisine in the US, comprising about 37%. We also found out that the Asian cuisine market share is approximately $31 billion.

In order to find out the total revenue of Chinese restaurants, we found 37% of $31 billion.

37% x $31 billion = $11.47 billion

In order to find out the total revenue of Chinese restaurants, we found 37% of 70,000 Asian restaurants in the US.

37% x 70,000 = 25,900 Chinese restaurants
We found out from the CHD Expert Report that independent restaurants make up 93% of the Asian restaurant market. We used this as a proxy for the Chinese restaurant market and used it to find the revenue generated by independent Chinese restaurants. We did this by finding 93% of $11.47 billion. This proxy is supported by the fact that the same report states that Chinese cuisine is the most popular Asian cuisine.

93% x $11.47 billion = $10.667 billion.
We used the same proxy to find the number of independent Chinese restaurants. We did this by finding 93% of the total number of Chinese restaurants (25,900). This number supports our first finding that states that a majority of Chinese restaurants are not chain restaurants.

93% x 25,900 = 24,087 independent Chinese restaurants.

We, therefore, concluded that there are approximately 24,087 independent Chinese restaurants generating $10.667 billion.
Part
03
of four
Part
03

Independent Restaurants - Indian

By our estimates, there are at most 3,712 independent Indian restaurants in the United States with total revenue of $568 million. These are rough estimates due to the limited availability of data and information on the subject matter. Below, we have detailed our research approach as well as our calculations.

Methodology

In order to identify the number of independent Indian restaurants in the United States, as well the revenue they generate per year, we commenced our research by searching for reports from credible research platforms such as Statista and IBISWorld and industry-related publications such as QSR Magazine. While there were a plethora of reports and articles from these sources, we did not find any report specific to Indian restaurants in the United States, let alone reports tailored to the independent Indian restaurants in the United States.

Our next strategy was to conduct a press search on the subject matter on the premise that news report talking about an Indian restaurant, franchise chain or otherwise, may hold relevant information that at the very least will provide useful data we can use to triangulate an answer. Our first breakthrough was an article by Business Insider, which quoted another article by the Washington Post (original article behind Paywall), which noted that the number of Indian restaurants in the United States was 5,000. There are two drawbacks with this data. The first is that the Washington Post article quoted by Business Insider is from 2015, which makes it quite old. A lot could have happened in 4 years since the article was published. The second drawback is the fact that it covers all types of Indian restaurants and not just independent restaurants.

We also found another article in the Food & Wine Magazine, in which Krishnendu Ray, chair of the Department of Nutrition and Food Studies at New York University stated that there were 4,000 Indian restaurants in the United States. We have used this later figure in our calculations below seeing as the source is from a more recent date. Since the data for the number of restaurants is inclusive of chain restaurants, we decided to find the number of chain Indian restaurants and then subtract it from the total. While there were no existing reports or database that aggregates this number, we were able to pull together the list of different chain Indian restaurants through a combination of methods.

Our research into the revenue of independent Indian restaurants in the United States followed a similar pattern as above, only that we did not find any relevant source during our research. We had to settle for a rough estimate, using the average revenue from a few restaurants as the benchmark for the number of restaurants we also estimated.

Number of independent Indian restaurants

According to our research, the chain Indian restaurants in the United States are:

Total chain restaurants: 45 locations + 43 locations + 5 locations + 23 locations + 2 locations + 10 locations + 160 locations = 288 locations

Number of independent restaurants= 4,000 - 288 = 3,712

Therefore, there are at most, 3,712 independent Indian restaurants in the United States.

Independent Restaurant Revenue

Paradise Biryani Pointe LLC (Monmouth Junction): $0.15 million
Paradise Biryani Pointe (Plainsboro): $0.15 million
Paradise Biryani Pointe (Jersey City): $0.07 million
Paradise Biryani Pointe (Artesia): $0.17 million
Paradise Biryani Pointe (West Des Moines): $0.31 million
Bawarchi Indian Cuisine (Fremont): $0.1 million
Bawarchi Indian Cuisine (Santa Clara): $0.14 million
Bawarchi Indian Cuisine (Reno): $0.09 million
Bawarchi Indian Cuisine (New York): $0.2 million
Bawarchi Indian Cuisine (Roseville): $0.12 million
Tiffin Indian Cuisine: $0.08 million
Now Curry Up: $0.26 million

Total revenue from the 12 companies is $1.24 million. Therefore, the average revenue per restaurant is $0.153 million. The estimated revenues for the 3,712 independent restaurants is, therefore:
$0.153 million * 3,712 = $568 million.

The estimated revenues of independent Indian restaurants in the United States is $568 million.

Part
04
of four
Part
04

Independent Restaurants - Mexican

As of 2018, there were about 26,910 independent Mexican restaurants in the United States. Each independent Mexican restaurant generates approximately $758,432 per year for a total of about $20.4 billion. Our methodology and calculations are below.

Methodology

To begin our research, we looked for a direct answer to the question of how many independent Mexican restaurants there are in the United States from industry publications like El Restaurante and RestaurantBusinessOnline. Through this method, we discovered that in 2018, there were 48,000 independent Mexican restaurants in the country; however, this included chains that have no more than 50 locations. This did not seem congruent with the term "independent," so we continued our search.

We located a market research report from CHD Experts that provided a breakdown of Mexican chains and independent restaurants, so we decided to triangulate the number. The report stated that in 2017, there were about 59,800 total Mexican restaurants (including chains). It also mentioned that 52% of limited service Mexican restaurants in the U.S. are chains, along with 3% of full service Mexican restaurants. This would mean that 55% of all Mexican restaurants in the United States are chains (52% + 3%). This also means that 45% of all Mexican restaurants in the United States are independent (100-55). We can then multiply the total number of Mexican restaurants in the U.S. (59,800) by 45% to get 26,910 independent Mexican restaurants (59,800 x 0.45).

We then turned our attention to the second part of the request, which is to find the total annual revenue for independent Mexican Restaurants. This proved to be much more challenging. We discovered that the Mexican restaurant industry as a whole in the United States generates about $45 billion in annual revenue. However, despite research into the industry publications mentioned above; research reports from companies like IBISWorld, Statista, and CHD Experts, among others; and media publications like Entrepreneur and Inc.; we were unable to find how much of that total revenue belonged to chains or independent restaurants. We did learn that the average Mexican restaurant in the U.S. generates $770,000 per location, but this did not provide us with any information on a breakdown between chains and independent restaurants.

Our next attempt was to find the market share of Mexican restaurant chains so that we could calculate the share of independent Mexican restaurants, then multiply the total market size by that percentage to triangulate the independent Mexican restaurant annual revenue. We looked into some statistics we had already used to triangulate the number of independent Mexican restaurants, including the stats that show 52% of Mexican limited serve restaurants are chains and 3% of full service restaurants are chains. However, this only referred to the number of locations and not revenue, so it was useless for this purpose. Likewise, we found that Taco Bell represents 42% of all limited serve Mexican restaurants, followed by Chipotle with 15%, Qdoba with 4.4%, Moe's Southwest Grill with 3.9% and Del Taco with 3.6%. While this data is interesting, it again only provided numbers for locations and not revenue.

We then conducted a thorough search through the industry publications mentioned above to see if we could locate any data that would allow us to triangulate the average revenue of an independent Mexican restaurant. We seemed to be on the right track when we located the 2018 Independent Mexican Restaurant Report that provided a breakdown of revenue bands for independent Mexican restaurants. However, the bands were too broad for us to find a reliable average revenue that would allow us to multiply that amount by the number of independent restaurants in the country. For instance, we learned that 7% of independent Mexican restaurants earned more than $1 million in 2018, but this did not allow us to find a reliable average since there's no indication of how much more than $1 million these restaurants earned, nor is there any data that shows how many restaurants earned between $500,000 and $1 million or below $500,000. The report only indicated that "the number of Mexican restaurants with sales between $500,000 and $1 million has climbed, while the number in the category below that has shrunk."

This report also provided us with the average check sizes for independent Mexican restaurants, which we thought might be helpful if we could find the average number of patrons an independent Mexican restaurant serves each year. We found that 40% of Mexican restaurants had an average check size of between $15 and $20, while 32% had an average check size of between $10 and $15. Unfortunately, despite extensive searches through research reports and industry publications, there was no information on the number of customers Mexican restaurants serve. We only found information on the growing Hispanic population in the U.S. and the increase in popularity of Mexican food.

As such, we switched gears again. According to Restaurant Business Online, the top 500 restaurant chains in the United States are responsible for more than half the overall restaurant revenue, and the top 250 chains are responsible for 94% of the chain revenue. Our assumption, then, was that the Mexican restaurants listed on the top 500 list would also be responsible for over 50% of the Mexican restaurant market and that the Mexican restaurants listed on the top 250 list would represent 94% of the Mexican chain revenue. In an attempt to narrow that 6% gap, we also searched for other prominent Mexican restaurant chains that would likely be listed from #250 to #500 of the top 500 list, which are behind a paywall.

This led us to Entrepreneur's list of Mexican Fast Food chains. We culled the companies already provided on the top 250 list, and searched for revenues for the remainder. Please note that we used Owler exclusively for these revenues, as this was the only resource that provided estimated revenues for all chains on Entrepreneur's list (except for three that no longer seem to be in business).

Taco Bell: $9.790 billion
Chipotle: $4.415 billion
Chili's: $3.527 billion
El Pollo Loco: $839 million
Qdoba: $822 million
Del Taco: $783 million
Moe's Southwest Grill: $715 million
Chuy's: $369 million
Taco John's: $367 million
On the Border Mexican Grill and Cantina: $351 million
Taco Cabana: $294 million
Rubio's: $220 million
Cafe Rio Mexican Grill: $208 million
Taco Bueno: $200 million
Uncle Julio's: $191 million
Fuzzy's Taco Shop: $188 million
Torchy's Tacos: $185 million
Pappasito's Cantina: $170 million
Baja Fresh Mexican Grill: $156 million
Cantina Laredo: $138 million
Freebirds World Burrito: $136 million
Tijuana Flats: $136 million
El Torito: $129 million
Abuelo's: $123 million
Salsarita's Fresh Cantina: $33.6 million
Chronic Tacos: $23.6 million
Costa Vida: $22.5 million
TacoTime: $14.2 million
California Tortilla: $14 million
La Salsa Fresh Mexican Grill: $10 million
Pancheros Mexican Grill: $9.5 million
Mucho Burrito: $7.3 million
Taco Casa: $5.3 million
Willy's Mexicana Gill: $4.2 million
America's Taco Shop: $3.5 million
Bubbakoo's Burritos: $3.2 million
Go Burrito: $1.7 million

Total Revenue for Mexican Chains (sum of all revenues above): $24,590,600,000

Total Revenue for all Mexican Restaurants in the U.S.: $45 billion

Approximate Total Revenue for Independent Mexican Restaurants in the U.S.: $20,409,400,000 ($45,000,000,000 - $24,590,600,000).

Approximate Number of Independent Mexican Restaurants in the U.S.: 26,910

Approximate Average Revenue per Independent Mexican Restaurant in the U.S.: $758,432 ($20,409,400,000 / 26,910)

We believe our calculations are reasonable since, using this triangulation, Mexican chain restaurants would represent 55% of the total Mexican restaurant market ($24,450,600,000 / $45,000,000,000). This would be in line with the data that shows chain restaurants are responsible for more than half the total revenue of the entire U.S. restaurant market. In addition, the revenue from the Mexican restaurant chains in the top 250 ($24,015,000,000, which is the revenues of Taco Bell through Tijuana Flats on the above list) represents 98% ($24,015,000,000 / $20,409,400,000) of the revenue generated by all Mexican restaurant chains listed here. This is a little more than the 94% mentioned by Restaurant Business Online, but due to a lack of information on the remaining Mexican restaurants on the top 500 list (because of a paywall), this is as close as we are able to get. We are confident, though, that the estimate of $20.4 billion for independent Mexican restaurant revenue in the United States is reasonable and accurate.
Sources
Sources