Factors Affecting the Growth of Fast Food Companies

by Gregory Gambone; Updated September 26, 2017
Woman Eating a Delicious Hamburger

Countless factors may affect the success of a fast food restaurant. Everything from the specific type of establishment to the size of the building and local community demographics can have a dramatic effect on a fast food establishment. Significant research and effort may be required to strengthen the business and increase profits.

More Than Just Burgers

Many different types of fast food establishments exist, each one with a niche in the marketplace. These restaurants cater to the public’s desire for different types of food. The most common type of fast food restaurants serve beef burgers and french fries. Other establishments serve only fish, chicken or similarly popular meals. Still, other niche restaurants cater to those who want only one type of food in varying degrees of presentation.

Avoiding Stiff Competition

The proximity of one fast food restaurant to others may have an effect on its success. If another establishment that serves identical meals is within a close range, the result will be increased competition and potentially lower gross sales. A restaurant that is near a similar one must attempt to draw customers from the competition with promises of additional benefits, features and lower prices. Obviously the highest chances of success exist when there are no other fast food restaurants close by.

Attracting a Large Customer Base, Literally

A fast food restaurant’s size may have significant effect on its success. Larger buildings can serve more customers at one time. Providing customers with appropriate seating in a comfortable environment increases the likelihood that they will stay for longer periods during meals, thereby increasing the chances that additional products, like desserts, may be purchased. Additionally, larger buildings allow for a more significant surface area for outdoor advertising. Signs, banners and other creative marketing methods can be applied to the exterior of the building, resulting in dramatically higher exposure to passersby.

Location, Location, Location

Demographics may be the most significant factors affecting the success of a fast food restaurant. Restaurant owners should examine the ratios of male to female, average income, education levels and other essential characteristics of the people living nearby. Advertising and marketing can be tailored to take advantage of the demographics information. Demographic information can be effectively used in drawing the local residents to the fast food restaurant.

What's In a Name

Something to consider is that many fast food restaurants may have certain measures for success based simply on their major trademarked names. Think McDonald's, Burger King and Wendy's and their quality management that lends itself to their financial success. Those establishments that are the nation’s leading fast food chains have a chance at attracting a number of customers merely because of familiarity and convenience. Predictability concerning products and prices often appeals to a large number of people.

About the Author

Gregory Gambone is senior vice president of a small New Jersey insurance brokerage. His expertise is insurance and employee benefits. He has been writing since 1997. Gambone released his first book, "Financial Planning Basics," in 2007 and continues to work on his next industry publication. He earned a Bachelor of Science in psychology from Fairleigh Dickinson University.

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