Understanding 4 Types of Quick Service Restaurants As a Startup Business Owner

QSR Quick Service Restaurant Definition: What’s all that Hype?

In 2023, the quick service restaurant industry worldwide was worth a whopping 978.4 billion dollars. Compared to last year, the industry grew by 1.1 percent.

If you’re wondering what’s fueling this growth - the answer is convenience, innovation, and customer experience.

By definition, a quick service restaurant efficiently runs featuring inexpensive meals that are always made by the same method, wholesome ingredients, and affordable upscale items. The meals are packed for take away, delivered to the customer, or fast in-store use with limited seating.

Bundle pricing is a key strategy used by quick service restaurants which involves combining products on the menu to make a bundle of complementary meals for example, a McDonald’s value meal includes fries, a drink, and a burger.

How does it benefit the business owners?

Customers mainly prefer these meals over a single food item as these meals add value to their expenses and give an aspect of diversity to their meals. 

From the retailer's perspective, they will be given attractive discounts with the bundled meals and establish significant margin profit to attract the consumers from these offerings, they can be taken away, delivered to the customer, or eaten quickly in-store where there is often limited seating available.

Let’s use our favorite grab-and-go restaurant as an example. 

Here’s how it works at McDonald’s, the typical QSR:

• You order a very limited menu at the counter or a kiosk.
• Your food is prepared quickly, following specific recipes.
• Your food comes in disposable packaging, and you can eat it on the go.

The QSR model allows the company to serve a higher volume of customers because the QSR model is designed to move people fast and efficiently, this also drives the company to create a consistent product while keeping costs at a minimum.

However, Macdonald's is not the only game in town; many other QSRs are playing by the same rules. Let's take a closer look at 4 types of quick service restaurants. 

Types of Quick Service Restaurants

And there you have it. 

1. HamBuHamburgerts

We’ll start with the OG QSRs – the burger joints! 

These are the spots that have been dishing out classic burgers, fries, and shakes for decades. The places you think of for a quick, delicious meal with no surprises. 

Honestly, though, who doesn't love the classic burger and fry combo ... or maybe even a delicious chicken sandwich?! Either way, the amazing food these hamburger joints make is endless.

McDonald’s, Burger King, and Five Guys are probably the only options that come to mind when you’re craving a quick, satisfying bite.

So what is it about these classic QSRs that make them such treasures? It’s a combination of nostalgia, convenience, and let’s face it, taste! These are the go-to's for a quick lunch, an easy dinner, and everything in between. 

The menus and branding are so iconic, you always know what you’re getting, and sometimes nothing tastes just as good as familiar Americana.

2. Pizza Parlours 

Next, we have Italy's favorite cuisine, the Pizzeria! Pizza parlors are the perfect place to get a meal that is tasty, quick, and of course, greasy. However, who is to say that quick and cheap cannot be delicious as well? 

They are made not for fine dining, but for satisfying a working man or women’s hunger. 

Pizzerias are home to various types of your favorite hand-crafted pies. Delicious, hot, and made to order, right out of the oven! Italian cuisine at its best! And, we can't forget about the sides - crunchy breadsticks and tangy wings that go along with your pie flawlessly. 

Just to name a few pizzerias that have earned a name for themselves: Domino’s, Pizza Hut, Papa John’s, and Little Caesars. 

You scan the menu, weighing the options: classic Margherita, meat lovers, veggie delight, or something more adventurous. Whatever your choice, you know you're in for a treat.

3. Fried Chicken Stands

Next, while discussing 4 types of quick service restaurants, we have the Fried Chicken Stands for fried chicken lovers.

These vendors provide you with all the crispy, crunchy, juicy chicken that you could ask for. 

They serve up great-tasting fried chicken that is expertly cooked to a golden, crispy perfection. The juicy chicken is breaded by hand which just makes the chicken that much more delectable.

When you think Fried chicken you think KFC, Popeyes, Chick-fil-A. These vendors can get you that same crispy juicy goodness. These QSR powerhouses have mastered the hand-breaded, deep-fried, hot-on-the-spot, give-me-another-piece masterpiece that foodies crave. 

With an emphasis on QSR, they offer quick, easy, and finger-licking good food that’s perfect for your on-the-go lifestyle.

4. Sandwich Shops 

Talking about the 4 types of quick service restaurants (QSRs), Sandwich Shops are the perfect destination to get rid of a bad day. 

These QSR big wigs feature a variety of sandwiches, subs, and wraps, all with different, but tasty flavor profiles typically created with fresh ingredients.

John’s, Jimmy John’s, Subway, and Potbelly’s are some of the big industry players.

They provide fast service, offer many ways to place an order, and a great value while using the freshest ingredients and coming up with creative combinations. This fits well with the Quick Service Restaurant (QSR) model, which highlights speed, convenience, value and/or affordability, and quality.

Key Features of Quick Service Restaurants

1. Simple Menus

One of the key factors to the quick service restaurant industry is its simple and easy menu. These restaurants, for the most part, have a simple and limited list of items that they offer. 

This is important as it simplifies kitchen operations, decreases food waste, and elevates customer flow as picking a quick service restaurant meal is speedy and easy!

2. Low Price Point 

The American cultural experience with fast food is so central that it's become a daily staple for many - in fact, a whopping 37% of Americans consume fast food every single day, according to a 2018 CDC study.

This demand is largely fueled by the economic appeal of affordable options, with consumers being drawn to fast food like bees to honey due to its budget-friendly pricing.

Restaurants offering low prices can attract a high volume of customers to make up for the lower profit margin. This will also ensure the effectiveness of competition with other fast-food restaurants and will be very attractive to price-conscious customers.

3. No Table Service

When it comes to the 4 types of quick service restaurants, one thing they all have in common is a focus on efficiency and speed. 

There is usually no table service, which keeps labor costs down and maximizes the speed at which food is served. Customers order and pick up their food at a counter, eliminating any need for waitstaff and reducing labor costs. The no-frills atmosphere sends a message to the customer to hurry up and eat, freeing up space for the next hungry customer.

4. Limited On-Premise Dining

There is usually a small amount of seating or largely no seating and there's a reason, or intent, behind that. If customers take their food to go or eat it quickly, the restaurant can serve more people, increasing sales for a given shift. Limited seating can also contribute to the management of employee-labor costs and the creation of a fast-paced environment.

5. Consistent Product Delivery 

Standardized recipes, ingredients, and cooking procedures ensure consistent product quality in the quick  service restaurant industry. Customers know what to expect from their experience, regardless of location. Consistent quality builds customer loyalty and drives repeat business in the quick-service restaurant industry.

6. Late Opening 

To attract customers who are looking for a quick bite after a night out or a late-night snack, most of the QSRs are open till late. 

This extended operating hour helps speedy food outlets to cater to more and more customers who are not free or are not available to have food during the regular hours hence increasing the revenue and sales.

Quick Service Restaurant vs. Casual Fast Food Restaurants? What’s the Difference 

QSRs like McDonald’s and Burger King are often in direct competition with fast-casual restaurant chains like Chipotle and Panera Bread. 

And, indeed, the two restaurant formats share many commonalities. However, there are some key differences you’re likely to see at a fast-casual chain that can help you distinguish it from the QSR down the street.

Note that the restaurant formats are different primarily in their pricing and their quickness in terms of service.

Let’s get to the meat of the matter.

Service

The quick-service restaurant industry managed a decline in foot traffic of 50 to 60% through prioritizing online ordering and delivery.

When you visit a McDonald’s or a Burger King, you know what to expect – quick service, affordable prices with a no-frills atmosphere - That’s typical of the quick service restaurant industry.

You order at the counter, pick up your food, and you’re on your way. 

On the other hand, fast-casual restaurants like Chipotle or Panera Bread offer a slightly different experience. You order at the counter, but then you take a seat and wait for your food to be delivered to your table. The atmosphere is often more welcoming, with comfortable seating and decor that encourages you to linger.

Menu 

In addition, the food that is served is another dramatic difference between the two. A QSR would typically serve crowd-pleasing favorites such as burgers, fries, and chicken nuggets. A fast-casual would have more of a variety of options to choose from and more involved meals to cook. You could have a delicious burrito, salad, or a sandwich with fresh ingredients, you never know with a fast-casual.

Another note to mention is that QSR usually skims on the quality of the food. Virtually anyone can walk in and create a value meal, most of the ingredients are frozen or refrigerated and can last months before spoilage. 

Pricing 

In terms of price, QSRs are the obvious victor, with most meals being less than $10.

In contrast, fast-casual restaurants have a slightly steeper price tag and average between $10 to $15 per meal. Some people may argue that the price hike reflects the higher quality ingredients and preparation time often dedicated to the more gourmet-style chains; nonetheless, it is slightly harder to justify the extra expense spent on a fast-casual meal.

For those looking for an inexpensive, easy meal that can be consumed quickly, QSRs are the obvious option. Many of these chains boast very low prices as well as the quick and easy options many of us are looking for.

Ambiance

Finally,  the atmosphere of QSRs and fast-casual restaurants varies. 

Most QSRs are set up for quick in-and-out, with minimal seating and either a take-out or drive-thru focus. In comparison, fast-casual restaurants provide a more enjoyable place to eat, often with comfortable seating, and decor that encourages customers to relax and stay awhile.

What are the Benefits of Opening Quick Service Restaurant?

Good Question!

Although the benefit(s) of opening a quick service restaurant vary from one business to another, they remain more or less the same. 

For entrepreneurs looking for low overhead and fast profitability –Quick Service Restaurants can be a viable strategy.

1. Low Investment, High Returns

While starting a business can be expensive, opening a QSR requires a relatively small amount of upfront capital. Because you have a small simple menu and just a bit of equipment, you can do this with a relatively low investment and have the opportunity of a very high return. 

This means you get to keep more of your money to either reinvest in your business or perhaps in yourself.

2. Quick Service = Happy Customers

Your customers are time-pressed and looking to speed through the services you offer. By streamlining your menu and operation procedure, you can remain rapid and satisfied. 

This is important when trying to brand yourself. 

Good customer service helps you to have a good recurring business and reputation. 86% of customers stay loyal and refer their friends to the companies that treat them well. 

By setting up your operation to be a fast and efficient establishment you can start building your success story.

3. Conveienent Locations 

Convenient locations are critical for any business. For QSRs, prime locations include high-traffic areas like shopping malls, transportation hubs, and tourist attractions. Setting up shop in these places allows you to use the foot traffic to your advantage, as potential customers pour into the area day in and day out. 

The result? More visibility and more opportunities to grow!

4. High Customer Turnover = Higher Revenue 

QSRs serve as many customers as possible to make more money. If you have great food quickly, loyal customers will follow. 

For example, let's say your QSR serves 500 customers a day, and the average order value is $10. This generates $5,000 in revenue each day. If you improved efficiency and served 750 customers per day, your daily revenue would be $7,500.

What are Some Key Challenges in the Quick Service Restaurant Industry?

The quick service restaurant industry may be advancing rapidly, 

But don’t jump on the bandwagon too quickly

It's a two-sided coin, presenting both opportunities and hurdles that demand careful consideration.

Let’s get into that;

Managing Multi Location Franchise 

Each franchisor has brand standards that must be adhered to across the organization. This is especially important for QSR franchisees, as many of them take on the responsibility of managing multiple locations/units. Ensuring consistency across all units can be a challenge:

• Training staff across multiple units: All employees must be trained to execute your brand's menu items, preparation processes, and customer service expectations. Doing this consistently across multiple locations can be tricky.
• Maintaining consistent inventory levels: Especially when/if you have different suppliers and/or distributors across your units
• Ensuring that each of your units is adhering to quick service restaurant industry standards across many different components: Menu offerings and pricing, marketing, etc.

Ensuring Consistent Quality and Customer Experience

Consistency is key in the QSR industry. 

Regardless of which location a customer visits, they expect the same quality and experience each time. While this expectation is easy to understand, providing a consistent experience can be a challenge as it relates to two specific areas: 

• Food quality and preparation: Every burger, sandwich, or salad needs to be made the same way every time. Again, this is particularly challenging if you have a large staff or operate multiple locations. 
• Customer service – Every customer expects great service and a friendly smile when they visit a quick-serve restaurant. How do you ensure that all of your team members provide the same level of service?

Keeping up with Quick Service Restaurant Trends

The QSR Industry as mentioned repeatedly in the post is everchanging. New trends and technologies are constantly emerging, which can be a challenge for QSR managers, especially if you own and operate a small QSR that faces resource constraints. 

• Staying up to speed with the latest technology (i.e., Mobile Ordering and Payment Systems) can be a challenge if you don’t have the money to buy the technology. 
• Also, keeping up with the competition in terms of the latest menu promotions and offerings can be a challenge, especially if you don’t have a huge marketing budget.

How Does Digitization Help the Quick Service Restaurant  Industry?

As a QSR operator, you are constantly searching for ways to make your business more efficient, reduce costs, and elevate the customer experience. One of the best ways to do all three is by using digitized solutions such as QSR restaurant management software, inventory technology, and POS systems. 

Some of the advantages of digitalized solutions for QSR are as follows.

•  Increase in Efficiency: Streamlined procedure and automation of duties save time and labor costs.
•  Increase in Accuracy: Lesser room for human error in customer data, placing orders, and inventory management.
•  Customer Experience: Greater service times, customized advertising, and loyalty schemes.
•  Data-driven Decisions: Real-time data and analysis to support better decision-making.
• Cost saving: Less wastage, optimized inventory, and energy savings.

Operational Applications and Efficiency Gains

There are several operational areas where digitized solutions deliver efficiency gains. The following list represents just some of these areas:

Inventory Management: Automated tracking and automated ordering can reduce wastage and alleviate the problem of overstocking / running out of goods.

Order Management: Digital ordering and kitchen display systems reduce errors and streamline food preparation.

Customer management: Loyalty programs, and personalized marketing driving better customer engagement

Labor Management: Scheduling software and time clock systems drive better staff utilization

Analytics and Reporting – Real-time data and insights support better business decisions

Case Studies and Success Stories

• ‍McDonald’s: McDonald’s implemented a digital ordering and payment system, resulting in a 30% increase in sales and a 25% reduction in labor costs. ‍
• Domino’s Pizza: Domino’s introduced an integrated digital ordering and delivery system, resulting in a 20% increase in online orders and a 15% reduction in delivery times.‍
• Starbucks: Starbucks launched a mobile ordering and payment app, which led to a 20% increase in sales and a 10% reduction in wait times.

Why is Xenia the Best Quick Service Restaurant Management Software?

Available on both iOS and Android platforms, Xenia is a robust ‘out of the box’ platform.

There’s a place for restaurant checklist apps with more advanced features and can be useful for any type of team configuration despite its utter simplicity. 

When you are on the move, you can simply download it on your iOS or Android device and you are good to go.

What does the Xenia quick service restaurant management software equal to? 

It’s the icing on the cake! 

Combining quick service restaurant industry processes and enhancing accountability, the tool enables you to maintain consistent operating procedures, food safety, and quality control, among various other day to day operations.

With over 500 free templates to get you started super-quickly, get cooking, and rely on Xenia to serve up successful QSR operations guaranteed to dish up service to your customers people will rave about for years to come.

Here’s a quick look at some of the notable features of Xenia for the quick-service restaurant industry 

Digital Checklists and Template Builder 

Xenia's checklist builder and template library have a simple design range with no training needed. Features such as unlimited step types, publicly accessible URLs, attaching media to checks, and conditional logic – the tool allows you to create digital checks in minutes, not days.

A quick-service restaurant manager can easily create a customized checklist to assign tasks to team members throughout the day such as preparation for the lunch rush, restocking supplies/ingredients, daily or weekly cleaning inventory management, and monthly cleaning/maintenance.

Standardized Processes and AI-Powered SOPs

What if you could have a team of expert and operations specialists working for you 24/7, ensuring every element of your restaurant is running perfectly, and consistently?

 That’s what Xenia’s AI-powered SOPs and standardized processes achieve, except they’re far more effective, insightful, and versatile than humans.

• Create an SOP for any number of restaurant tasks that have specific sections allocated to your particular restaurant’s team member(s).

For example, you can assign the “Food Ingredients Receiving and Storage” process to team members of your choice, and put conditional logic for temperature control. Any temperature range that goes beyond the desired threshold will automatically notify the manager in charge.

• Create a customer service SOP whose responses can adjust depending on the customer's complaint.

Set up responses for a disappointed customer, that will let the staff know to give the customer a discount or replacement meal.

That is just the tip of the iceberg.

The tool has a much larger impact than this

Food Monitoring 

The food monitoring module of Xenia is a game-changer for the quick service restaurant industry. 

As mentioned earlier, by checking the temperatures of your refrigerator and freezer regularly and using a warning system for any changes, you can guarantee that the food you store and serve stays in a pristine state. 

Following an easy-to-use step-by-step guide, this food safety innovation was created with the busy operator in mind. With a portable, lightweight design, it is user-friendly and easy to integrate into any food service environment.

How it works?

• To prevent spoiling of food, constantly check the internal temperature. (Example: Get an alert if the temperature inside the fridge is above 40°F.)
• Monitor the freezer's temperature to prevent a temperature rise. (Example: Get an alert if the temperature inside the freezer goes above any specific range.)

Operation Templates

This is the area where you can build inspections, audits, and several other activities for increased accountability and monitoring purposes.

Design inspection forms that are unique to your QSR operations, use weighted scoring for grading, conduct grading per the health code (not one size fits all), and use geo stamps to know where you are. 

And the best part?  You can use QR codes that add a link from your website to a simplified online inspection report.

Some examples of ways you might use Xenia templates for your restaurant include, but aren’t limited to:

• A food quality control template with conditional logic for adaptive responses. For example, you could set up a response for a low score that automatically notifies the QSR Manager and requires staff to re-train on proper food preparation and presentation procedures
• A cleaning and sanitation schedule template with customizable tasks and frequencies. For example, you could set up a daily cleaning schedule for high-touch areas like countertops and door handles and a weekly deep cleaning schedule for kitchen equipment and floors
• An inventory management template with automated alerts for low stock levels. For example, you could set up alerts for critical inventory items like meat and produce that trigger an automatic re-order when inventory falls below a certain threshold

Restaurant Tasks - AKA Work Orders

The comprehensive task assignment tools allow you to plan your QSR Kitchen duties to be done on time and with accountability.

How? 

• Assign a work order to a maintenance staff member to repair a broken ice machine.
• Receive a notification when a maintenance staff member completes a work order, such as repairing a piece of equipment.

Real-Time Collaboration 

Use the integrated messaging system to directly engage your entire team, or get real-time updates by a specific team member through a specific task.

The possibilities are endless!

And it doesn't stop there. Don’t forget to encourage the team members to address the issues directly.

• Address a customer complaint as a group by involving others in the kitchen staff and management to resolve

Address a guest who is unhappy with his sandwich overcooked or a salad that was served with a plastic glove in it

• Collaborate with staff on a new menu item by involving others in the kitchen staff and management

Bring up and introduce a new menu item to the rest of the staff such as ingredients, preparation, and pricing.

Corrective Actions 

As inspection results are generated, you can set up corrective actions accordingly to rectify any pending issues.

• Create a corrective action plan for a failed health inspection:

- Conditional logic: If the inspection score is below the optimal level, trigger a corrective action plan that includes retraining staff on proper food handling and preparation procedures.

• Develop a corrective action plan for a customer complaint

- Conditional logic: If the complaint is related to food quality, trigger a corrective action plan that includes retraining staff on proper food preparation and presentation. 

• Monitor the status of corrective activities

- Example: Track the completion status of corrective actions and receive notifications when activities are overdue or completed.

Over To You

And ther eyou have it: a detailed insight on quick service restaurant industry and how things pan out against different types of QSR businesses.

In case you have any questions, feel free to reach out to us. We'd be more than happy to answer all your questions.