Large fast food franchises are as much about attracting franchisees as they are about attracting customers. And if the huge store is among the best fast food chains, it indicates that they are doing a very good job. McDonald’s promises partners the opportunity to “build a legacy”; Wendy’s offers franchisees “a path to prosper and the prospect to lead”; and Burger King guarantees a “proven business model with innovation and growth at its core”.
For some fast food chains, however, the business model seems to start and end with the franchisee talk: partners are onboarded with the promise of low start-up costs and quick profits, but are then left to fend for themselves. which ultimately leads to the failure of the brand as a whole.
Here’s a look at five flash-in-the-pan restaurant chains that once had huge promise but have fallen to rock bottom.
In the late 2010s, Burgerim was hands down the fast food brand to watch. Founded in 2016, the chain has grown at an incredible pace, opening 200 restaurants and securing 1,200 franchise deals in just a few years. Industry publication catering company ranked the channel at the top of its 2019 Future 50 list, declaring it “the fastest growing emerging channel in the country”.
It turns out, however, that Burgerim’s success was too good to be true. More akin to a pyramid scheme than a legitimate franchise company, Burgerim attracted inexperienced operators with low start-up costs and money-back guarantees, but offered little advice or support.
In 2019, the chain was in crisis, with franchisees struggling with construction and rental spending, slow sales and restaurant closings. Many owners jumped ship, choosing to switch brands or operate independently. Today, there are about 80 Burgerim-branded restaurants left, but the franchise barely exists.
Founded in 1981 in Colorado, Quiznos grew rapidly in its first two and a half decades in business, reaching a store count of nearly 5,000 restaurants by the late 2000s. But the sandwich chain n couldn’t weather the recession and, struggling with $875 million in loans following a leveraged buyout in 2014, filed for bankruptcy the same year.
Between 2007 and 2017, Quiznos lost an incredible 90% of its restaurants and saw its sales drop from $1.9 billion to $171 million. With a current footprint of around 170 units, Quiznos hopes to reinvent itself as a digital brand, thanks to a distribution deal with Ghost Kitchen Brands.
Popular for its roast chicken, turkey and meatloaf, the Boston market hit its peak in the late 90s. The fast-food chain caused a stir with an initial public offering in 1993 and, attracting interest investors, grew to more than 1,100 restaurants in 1998.
Similar to Quiznos, however, the Boston market suffered a precipitous decline. Faced with increased competition from supermarkets, the chain’s sales declined between 1996 and 1998, and hundreds of millions of franchise loans were written off.
A Chapter 11 bankruptcy soon followed, with Boston Market declaring $283 million in debt and closing 16% of its stores. From a peak of more than a thousand restaurants decades ago, the number of stores in the Boston Marketplace has currently fallen to about 328.
Red Barn was founded in 1961 and grew rapidly in its early years of business, growing from a regional brand to a national chain with a footprint of 300-400 restaurants in 19 states. It was popular for its Big Barney and Barnbuster burgers, as well as its industry-first self-serve salad bars.
However, early success was followed by a rapid decline: business began to slow following an acquisition by United Servomation in the late 1960s, and within a decade Red Barn had was acquired by City Investing Company (Motel 6’s parent company), which, interested primarily in Red Barn real estate, bled the chain dry by letting franchisee leases expire. In 1988, Red Barn was officially bankrupt.
Similar to Red Barn, Burger Chef grew rapidly in its first two decades in business, but collapsed in the 1980s due to increased competition in the fast food industry.
Founded in 1957 in Indianapolis, Burger Chef has carved out a niche with a number of industry-first innovations, including a patented flame grill and fast food’s first kids’ meal. The chain grew at a phenomenal rate, growing from 600 restaurants in 1968 to more than 1,000 in 1972, a striking distance from McDonald’s, which in the same year had a footprint of around 1,600.
But as the fast food industry grew more crowded (Midwest competitor Wendy’s was on the scene in 1969), Burger Chef began to falter. In 1978, the chain lost its monopoly on the children’s meal category with the launch of McDonald’s Happy Meal, and three years later was acquired by Hardee’s and scrapped for parts.