The real reason chains are taking over the restaurant industry

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Large-scale restaurateurs knew this pivot would happen even in 2020 when, on an earnings call, Domino’s then-CEO Ritch Allison warned that while diners loved independent restaurants, there was a new standard that all owners and operators had to navigate. “If you operated an independent pizzeria with a significant portion of your meals on site, and relied on a mix of beverages and alcohol to bring a good margin to your business, if that business has now moved to where you need to doing most of it off-site and if most of that has to come from paying really high fees to third-party aggregators, it’s just a really tough operating environment,” he said, per Restaurant Business.

As further evidence of the disparity between restaurant chains and independents and that smaller restaurants were closing, Yum Brands, which operates Taco Bell, KFC and Pizza Hut, said it opened a new restaurant every two hours in 2021, which resulted in 4,180 new spots. CEO David Gibbs called the growth a testament to “the health of our business, iconic brands, capable, committed and well-capitalized franchise partners and the economic strength of the unit,” according to Insider.

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