Kevin JohnsonMcDonald’s is one of the most recognized fast-food restaurants globally. Brothers, Maurice and Richard McDonald, opened the chain’s first restaurant in 1948 in San Bernardino, California, its current headquarters.
In 1955, Ray Kroc partnered with Maurice and Richard to build the company. Kroc acquired the fast-food chain from the McDonald brothers in 1961. The chain introduced the iconic golden arches in 1962 and corporate mascot Ronald McDonald in 1963.
Since then, McDonald’s has expanded to more than 39,000 locations across over 100 countries. In 2021, the burger giant had 375,000 employees and generated $23.2 billion in revenue. McDonald’s profits soared 59% to $7.5 billion. [1]
McDonald’s revolutionized the fast-food industry by blending the quick-service and franchise system. This flexible model eliminated the need for waiters and spread the costs to franchise owners.
In 2021, McDonald’s increased Big Mac and Chicken McNugget prices to offset rising food and labor costs. This move propelled its 2021 revenues to the highest level since 2016. But the company faces stiff competition from quick-service and fast-casual brands, such as Burger King, Wendy’s, KFC, Starbucks, Subway, and Chipotle. [2]
Here is an in-depth analysis of top McDonald’s competitors and alternatives:
1. Burger King
Year founded: 1953
Headquarter: Miami-Dade County, Florida
Burger King is one of the leading fast-food restaurants globally, with over 18,000 locations in more than 100 countries. It is a subsidiary of Restaurant Brands International and sister-company of Tim Hortons and Popeyes. In 2021, Restaurant Brands’ revenue jumped 37% to $1.44 billion. Burger King contributed to the growth, with a 13% increase in comparable sales in the US.
Burger King and McDonald’s offer soft drinks, hot dogs, desserts, hamburgers, chicken, and French fries. Both run successful franchise models and compete in the burger war, with Burger King’s Whopper challenging McDonald’s Big Mac.
In 2021, Burger King launched a new hand-breaded fried chicken sandwich. This sandwich generates double the sales of the previous item. The burger chain is attracting more consumers with higher incomes and spending power. Burger King is the top McDonald’s competitor and alternative. [3]
2. KFC
Year founded: 1953
Headquarter: Louisville, Kentucky
KFC is the second largest fast-food chain after McDonald’s, with 22,621 locations in around 150 countries. The chain is a subsidiary of Yum! Brands, along with Taco Bell and Pizza Hut. In 2021, KFC’s same-store sales increased by 6%. [4]
KFC is renowned globally for its ‘Finger-Licking’ fried chicken. The chain also offers burgers, salads, French fries, and soft drinks, similar to McDonald’s menu. By Jul 2021, KFC’s digital sales had surpassed its 2020 annual online revenue. Increased online demand for its tacos and fried chicken in 2021 contributed to Yum’s revenue growth.
The fast-food chain also introduced a new chicken sandwich in all its 4,000 US restaurants in Feb 2021. This new menu item can increase KFC’s revenues and competitive advantage over McDonald’s. [5]
3. Wendy’s
Year founded: 1969
Headquarter: Columbus, Ohio
Wendy’s is a leading quick-serve and fast-food chain. The company and its franchisees employ hundreds of thousands of people across 7,000 restaurants globally. In 2021, Wendy’s generated $1.897 billion in revenue.
Wendy’s was founded on the premise, “Quality is our Recipe.” The chain is best known for its made-to-order square hamburgers and freshly-prepared salads.
Like McDonald’s, Wendy’s also offers burgers, French fries, and other classic American foods. But its signature items like chili, baked potatoes, and desserts set it apart from its rival. Wendy’s is one of the top McDonald’s competitors. [6]
4. Subway
Year founded: 1965
Headquarter: Milford, Connecticut
Subway is a restaurant chain operated by Doctor’s Associates. It is one of the world’s largest quick-service restaurant brands, with 37,540 locations across 100 countries. In 2021, Subway had around 5,000 employees and made $10.2 billion in the US. Its sales exceeded projections by $1.4 billion.
Subway serves sandwiches, salads, paninis, wraps, doughnuts, muffins, and cookies. But its top-selling menu item is the submarine sandwich, marketed as a healthier alternative to burgers offered by rivals like McDonald’s.
Unlike McDonald’s, Subway doesn’t own a single location. The chain collects 8% of revenue from each franchise restaurant, operated by over 20,000 entrepreneurs. In 2021, Subway executed the most extensive menu update as part of the Eat Fresh® Refresh campaign. Subway is one of the best McDonald’s alternatives for health-conscious consumers. [7]
5. Taco Bell
Year founded: 1962
Headquarter: Irvine, California
Taco Bell is a fast-food chain operating as a Yum! Brands subsidiary. The chain has over 7,300 locations and serves around 2 billion customers annually. In 2021, Taco Bell had about 175,000 employees and delivered an 8% jump in same-store sales.
Taco Bell offers Mexican-inspired foods, including quesadillas, tacos, nachos, and burritos. Its menu items compete indirectly with McDonald’s. Both chains operate globally, with a strong market presence in the US and Canada.
In Aug 2021, Taco Bell reintroduced its breakfast menu. This relaunched Tex-Mex breakfast increases Taco Bell’s competitive advantage over McDonald’s. [8]
6. Chipotle Mexican Grill, Inc.
Year founded: 1993
Headquarter: Newport Beach, California
Chipotle is a fast-casual restaurant chain serving tacos, burritos, bowls, and salads. The company operates 2,950 restaurants in the US, Canada, the UK, France, and Germany. In 2021, Chipotle had around 100,000 employees and reported a 26.1% increase in revenue to $7.5 billion.
Chipotle and McDonald’s have a long history. About 17 years ago, McDonald’s spun off its Tex-Mex food division to create Chipotle Mexican Grill. Today, Chipotle is the only fast-food chain of its size that owns and operates all its restaurants.
In 2021, Chipotle was recognized in Forbes’ America’s Best Employers and Fortune’s Most Admired Companies. Chipotle is one of the most innovative indirect competitors for McDonald’s. [9]
7. Starbucks
Year founded: 1971
Headquarter: Seattle, Washington
Starbucks is the world’s largest coffeehouse chain, with 33,833 stores in 80 countries. The quick-service brand offers coffee, espresso, cappuccino, tea, pastries, and sandwiches. In 2021, Starbucks had 349,000 employees and reported a 24% increase in revenues to $29.1 billion. [10]
Starbucks is the premier retailer of specialty coffee globally, committed to ethically sourcing and roasting high-quality arabica coffee.
The chain also offers several foods featured on McDonald’s menu. But it provides high-quality options at a higher price point than McDonald’s. Starbucks is a worthy McDonald’s competitor.
8. Popeyes
Year founded: 1972
Headquarter: Miami, Florida
Popeyes is an American fast-food restaurant chain that offers fried chicken. It is a subsidiary of Restaurant Brands, along with Burger King and Tim Hortons. In 2021, Popeyes had around 6,000 employees working across its 3,451 locations.
Food service chains introduced more than 95 new sandwiches in the first half of 2021, including McDonald’s. These products contributed to Popeyes’ 2% decline in 2021 sales. McDonald’s has been investing in its loyalty program for years.
In Jun 2021, Popeyes launched its first-ever rewards program to undercut McDonald’s competitive advantage. As a subsidiary of Restaurant Brands, Popeyes has enough resources to poach some customers from McDonald’s. [11]
9. Dunkin Donuts
Year founded: 1950
Headquarter: Canton, Massachussets
Dunkin is a quick-service restaurant specializing in coffee and doughnuts. The company operates around 12,900 restaurants in 42 countries. In 2021, Dunkin had about 270,000 employees and generated $1.4 billion in revenue.
Dunkin’ customizes its seasonal menu to enhance customers’ experience. In Feb 2022, the chain introduced salted caramel cream cold brew and latte, roasted tomato toast, and chocolate croissant. This seasonal menu with new delectable offerings is ideal for spring. It can help Dunkin’ attract some customers from McDonald’s. [12]
10. Pizza Hut
Year founded: 1958
Headquarter: Plano, Texas
Pizza Hut is the world’s largest pizza chain, with 18,703 restaurants globally. It is a subsidiary of Yum! Brands, along with Taco Bell and KFC. In 2021, Pizza Hut had about 350,000 employees and posted a 3% increase in same-store sales. The labor shortage in 2021 undermined its efforts to launch a comeback in the US market. [13]
Pizza Hut offers a wide pizza variety, including Thin-n-Crispy, Sicilian, and Stuffed Crust. But the chain also serves Italian-American dishes, dessert, and Buffalo wings. These tasty foods can poach some McDonald’s customers. Yum! Brands’ backing also increases Pizza Hut’s competitive advantage over McDonald’s.
11. Domino’s Pizza
Year founded: 1960
Headquarter: Ann Arbor, Michigan
Domino’s is the second-largest pizza chain globally after Pizza Hut, with over 14,000 stores. Since its founding, Domino’s has gained a cult-like following among pizza lovers. In 2021, Domino’s had 260,000 employees and generated $2.47 billion in revenue.
Domino’s is a pizza specialist. But it also serves desserts, chicken wings, pasta, and sandwiches. The chain introduces new menu items regularly to spice up its customers’ dining experience.
The latest Domino’s pizza piles up 34 toppings on a single crust, including tomato sauce, basil, pepperoni, Hokkaido camembert, and seafood mix. Domino’s is an innovative McDonald’s competitor. [14]
12. Tim Hortons
Year founded: 1964
Headquarter: Oakville, Canada
Tim Hortons is Canada’s largest quick-service restaurant chain. This fast-food chain serves coffee, doughnuts, and other food items featured on McDonald’s menu. In 2021, Tim Horton’s had around 1000 employees and operated 4,846 restaurants in 14 countries.
Like Starbucks, Tim Hortons doesn’t compete directly with McDonald’s. But it offers alternatives to food items served by McDonald’s. In Feb 2022, Tim Hortons relaunched its top-selling donuts; the Apple Fritter and the Boston Cream.
The Apple Fritter is packed with over 40% more apples, while the Boston Cream has over 33% more filling. Pairing these tasty donuts with freshly brewed coffee can entice even the most loyal McDonald’s customer to visit Tim Hortons. [15]
13. Costa Coffee
Year founded: 1971
Headquarter: Dunstable, UK
Costa is a British coffeehouse and one of the largest coffee brands globally. In Jan 2019, Coca-Cola acquired Costa Coffee for $4.9 billion. The company has 16,000 employees working in its 2,500 coffee stores in the UK and employs 10,000 people across its franchises globally.
Costa Coffee was recently awarded the top spot on The Nation’s Favorite Coffee Shop by UK consumers. In 2021, the coffeehouse partnered with Marks & Spencer to expand its menu options. Costa customers now have access to iconic M&S foods, including fresh salads, sandwiches, vegan-friendly dishes, and gluten-free baked products. This partnership increases Costa’s competitive advantage over McDonald’s. [16]
14. Papa John’s Pizza
Year founded: 1971
Headquarter: Louisville, Kentucky
Papa John’s is the third-largest pizza delivery and takeout chain in the US. The company operates more than 4700 branches, including company-owned and franchised restaurants. For the full year of 2021, Papa John’s posted a 14.1% increase in revenues to $2.1 billion. [17]
Papa John’s hired 30,000 workers in 2020 to meet increased demand for its pizza delivery service. With over 70,000 employees, Papa John’s is a force to reckon with in the fast-food sector. It is one of the top indirect competitors for McDonald’s.
15. Panera Bread Company
Year founded: 1981
Headquarter: St. Louis, Missouri
Panera Bread is a bakery-café and fast-casual restaurant chain, with over 2,000 locations in the US and Canada. It is a subsidiary of JAB Holding, along with Caribou Coffee and Einstein Bros. Bagels. In 2021, Panera Bread had around 10,000 employees and made $2.8 billion in revenue.
Panera Bread makes delicious sandwiches and high-quality chicken. The company went private in 2017 after it was acquired by JAB Holding for $7.5 billion. But Panera is going public again.
In Jul 2021, Panera Bread filed for an initial public offering. The firm also secured an investment from SPAC company USHG Acquisition Corp. Going public can increase Panera’s financial resources and competitive advantage over McDonald’s. [18]
16. Jack in the Box
Year founded: 1951
Headquarter: San Diego, California
Jack in the Box is a fast-food restaurant chain with over 2,200 locations. It is the fifth-largest burger chain in America and serves 21 states. In 2021, Jack in the Box had 22,000 employees and generated $1.14 billion in revenue. [19]
Jack in the Box owns Qdoba, a Mexican-inspired fast-casual chain with 700 restaurants. The chain is renowned for its low-cost tacos, which blend beef, chicken, and soy-based vegetable protein. Jack in the Box has a cult-like following on the West Coast, making it one of the top McDonald’s competitors in this region. [20]
17. Pret a Manger
Year founded: 1983
Headquarter: London, UK
Pret is a British sandwich shop with 324 locations in London and around 140 stores globally. The London-focused chain has amassed almost £400m in debts, creating uncertainties about its future. In Jan 2022, Pret doubled its standby facility reserved to £200m, up from £100m. This fund will support the business in case of difficulty in 2022. [21]
Both Pret and McDonald’s offer sandwiches, coffee, espresso, baked goods, soup, and breakfast items. But Pret provides fresh and high-quality bakery items, better alternatives to baked products offered by McDonald’s. The company is a household name in London, increasing its competitive advantage over McDonald’s.
18. Sbarro
Year founded: 1956
Headquarter: Columbus, Ohio
Sbarro is a pizzeria chain specializing in Italian-American cuisine and pizza items. The chain has more than 600 locations in around 26 countries worldwide. In 2021, Sbarro generated $185 million in revenue in the US alone.
Sbarro offers NY-style pizzas sold by the slice, appealing to students and young professionals in US cities. The Columbus-based pizza chain is partnering with convenience stores to drive growth.
In 2021, Sbarro opened seven restaurants in Columbus, with one joint at 6195 Cleveland Ave. Malls and convenience stores bring Sbarro’s pizzerias closer to its target market. Sbarro is one of the best McDonald’s alternatives for younger consumers. [22]
19. Hungry Jack’s
Year founded: 1971
Headquarter: Sydney, New South Wales, Australia
Hungry Jack’s is an Australian fast-food chain owned by Competitive Foods Australia. The chain is a franchise of Burger King Corp, the top McDonald’s competitor. In 2021, Hungry Jack’s had 16,500 employees working across over 400 locations.
The company owns, operates, and sub-licenses all Burger King restaurants in Australia. According to a recent report, Hungry Jack’s handled the supply chain crisis better than McDonald’s.
The chain established several protocols in 2019, ensuring sustainable restaurant operations. During this period, McDonald’s struggled due to staff shortages. Hungry Jack’s is one of the top McDonald’s competitors in Australia. [23]
20. Nordsee
Year founded: 1896
Headquarter: Bremerhaven, Germany
Nordsee is a German fast-food chain that offers seafood, fish sandwiches, and fish-based foods. The company operates 370 stores in Germany, Austria, Cyprus, and the Czech Republic. In 2021, Nordsee had around 6,000 employees across Europe.
Nordsee’s top-selling food items include the Backfisch-Baguette and Fisch-Chips. In Apr 2021, the fast-food chain introduced plant-based versions of these dishes.
Customers can enjoy plant-based variants Backvisch-Baguette and Visch-Chips in Nordsee restaurants. Nordsee is the best McDonald’s alternative for seafood lovers in Germany, Austria, Cyprus, and Czech. [24]
References & more information
- McDonald’s Corp (2022, Jan 27). McDonald’s Reports Fourth Quarter and Full Year 2021 Results. PRNewswire
- Creswell, J. (2022, Jan 27). McDonald’s topped $23 billion in revenue in 2021. The New York Times
- Paramasivam, P. (2021, Jul 31). Burger King U.S. sales power Restaurant Brands’ results beat. Reuters
- Sophia, D. M. (2021, Oct 28). Taco Bell, KFC sales power Yum’s results beat as Pizza Hut lags. Reuters
- Praveen, P. (2022, Feb 9). KFC-parent Yum Brands sales are boosted by demand for tacos and fried chicken. Reuters
- Wendy’s Company (2022, Mar 1). Wendy’s Reports Fourth Quarter and Full Year 2021 Results. PRNewswire
- Subway (2022, Feb 22). Subway Record-Setting 2021 Sales to Fuel 2022 Positive Momentum. PRNewswire
- Lucas, A. (2021, Oct 28). Taco Bell’s parent earnings beat, fueled by strong demand for KFC. CNBC
- Chipotle Mexican Grill (2022, Feb 8). Chipotle Announces Fourth Quarter and Full Year 2021 Results. PRNewswire
- Starbucks Corp (2021, Oct 28). Starbucks Reports Record Q4 and Full Year Fiscal 2021 Results. Starbucks Press
- Doughman, E. (2022, Feb 19). Popeyes ties 2021 sales decrease to chicken competition. Wattag.net
- Dunkin’ (2022, Feb 23). Dunkin’ Introduces New Items to Shake Up Spring Menu. Dunkin’ Press
- Lucas, A. (2022, Feb 9). Yum Brands misses earnings estimates as higher costs weigh on profits. CNBC
- Bondarenko, V. (2022, Mar 7). Domino’s Does Something Brilliant or Terrible to Its New Pizza. The Street
- Tim Hortons (2022, Mar 3). Tim Hortons relaunches two of Canada’s favorite donuts! Cision Newswire
- WCP Editor (2022, Jan 27). Costa Coffee voted ‘The Nation’s Favorite’ for the 12th consecutive year. World Coffee Portal
- Papa John’s International (2022, Feb 24). Papa John’s Announces Fourth Quarter and Full Year 2021 Financial Results. Business Wire
- Lucas, A. (2021, Nov 8). Panera Bread announces SPAC investment, will return to the public markets through an IPO. CNBC
- Lock, S. (2022, Jan 24). Revenue of Jack in the Box Inc. from 2009 to 2021. Statista
- John, S. (2022, Jan 13). 7 Secrets Jack in the Box Doesn’t Want You to Know. Eat This!
- Butler, S. (2022, Fed 18). Pret a Manger in cash calls on shareholders as finances is under pressure. The Guardian
- Eaton, D. (2021, Jan 12). Sbarro opens a new Columbus site, more coming in 2021. Biz Journal
- Sharples, S. (2022, Jan 12). Hungry Jacks, McDonald’s, Red Rooster, and Oporto struggling with Omicron surge. News Au
- Minchin, J. (2021, Apr 16). Plant-based seafood on the menu at the fast-food chain. New Food Mag
- Featured image by Brett Jordan
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