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- Ten companies control more than 50 of the biggest names in the chain restaurant business, from Panera to Burger King.
- As it becomes more expensive to run a restaurant, more chains are consolidating under mega-companies.
- Here is a look at who actually owns some of the biggest names in the restaurant business.
Your favorite fast-food chain may not be exactly what it seems.
While chains like Burger King, Taco Bell, and Olive Garden have name recognition, many of the biggest brands in the restaurant business are actually owned by mega-companies. These holding companies and private-equity firms often invest in or own a number of brands, in and outside of the restaurant industry.
As costs rise, scale is increasingly crucial in the restaurant business.
"If you can take it and spread the cost across 8,400 restaurants versus 3,600 restaurants … there’s an inherent advantage in that," Paul Brown, the CEO of Arby’s, Sonic, and Buffalo Wild Wings parent company Inspire Brands, recently told Business Insider.
Here is a look at which companies actually own some of the biggest names in the restaurant business:
Yum Brands
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Yum Brands owns KFC, Pizza Hut, and Taco Bell.
"We don’t need to do an acquisition to build scale. We already have scale," David Gibbs, Yum Brands’ president and chief financial officer, told Business Insider in December.
Gibbs says he believes scale is becoming increasingly important. For example, the company’s scale helped make possible its deal with GrubHub, in which Yum Brands purchased a $200 million stake in the delivery company.
"That’s why you’re seeing so many other companies go out and try to acquire new concepts just to try and build their own scale," Gibbs said.
Restaurant Brands International
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Restaurant Brands International is the parent company of Burger King, Tim Hortons, and Popeyes.
"In the past, you’ve seen us be opportunistic," executive chairman Daniel Schwartz said in a call with investors on Wednesday, regarding the company’s acquisition strategy. "We’ve acquired three incredible brands that we think have great global growth potential."
Going forward, Schwartz said that Restaurant Brands International would consider acquiring other "iconic" brands with significant long-term growth potential.
Darden Restaurants
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Darden Restaurants is the Orlando, Florida-based company that owns eight chains, including Olive Garden, LongHorn Steakhouse, and Cheddar’s Scratch Kitchen.
"Really, nothing has changed in the last 40 years with dining," Darden CEO Gene Lee said in a presentation in January.
"With all the technological advancements, if you think about it, we’re still basically doing the same thing," Lee continued. "I don’t see in the next 10 years any dramatic changes other than a continued transparency with what you’re serving people. And, I think, you are going to have to be a little bit more convenient for them."
See the rest of the story at Business Insider
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Source: Business Insider – feedback@businessinsider.com (Yutong Yuan)