Why are American brands taking over the UK QSR market?

The British QSR market has seen an influx of American fast food brands coming into the UK and rapidly expanding. According to data from various sources there are over 6,500 American QSR sites in the UK. This can be best seen in the recent announcement from Popeyes that it is looking to expand in 2025, planning to double its UK footprint with the opening of more than 45 new restaurants. Popeyes is not the only brand to have made the jump across the pond recently, Wendy’s, Wingstop and Taco Bell have all successfully set up and begun ambitious expansion plans across the UK. So what makes the UK so attractive to American brands, why do brands see it as a viable market despite the already existing competition? And is there a danger we could see the market become saturated in the coming years.

Why is the UK so attractive?

The main question when discussing the influx of American brands into the UK is what makes the UK such an attractive proposition compared with other larger and more populous alternatives? Now American fast food brands are not a new thing in this country, McDonald’s opened its first UK site in October 1974 and KFC opened in the UK even earlier in May 1965, but the arrival of the less global American brands is certainly new.

According to Simon Chaplin, pub, restaurant and franchise expert at Christie and Co, the biggest reason is the British public’s affiliation and fascination with all things American. Brits have always been fascinated with American culture, from its music to its TV shows, and we have had such exposure to this culture that there has always been a market for more American things in Britain. As Chaplin puts it “it’s an international flavour that the UK traveler has brought back to the UK”.

But there are more technical reasons deeper than just the Brits’ love for all things American. First of all, both countries share a language which makes the process of expansion into the UK a lot easier than to any other country. The UK also offers American brands a good entry point into Europe with less struggles due to the lack of a language barrier. The UK also has less regulations than other European countries such as France and Germany which can make the American businesses easier to port over to the UK.

The rise of the franchise

More importantly, Chaplin sees the increase in the viability of franchising as a large reason for the proliferation of American businesses expanding internationally. As a result of this model, American companies no longer have to spend time adapting to new laws and regulations, they can just sell their brand to someone already based in the country and let them handle it. As Chaplin says, what was once a big problem for US brands has been removed with franchising.

“An issue maybe 15 or 20 years ago was labour laws. They [American companies] couldn’t quite understand why somebody who was employed had any rights at all. I think it’s because of franchising that they’ve accepted it, because it’s not them who’s paying the wage, it’s the franchisee, and consequently, they’re not as upset with what happens there.”

Chaplin also believes that franchising offers more certainty from both sides of the deal. For the brand they get people on the ground in the country they are expanding to who know the country, lessening the risk of adaptation. For the franchisee, they get a well known brand which will give you operational support, marketing support and food innovation support meaning you only have to focus on selling the products.

“I think 80% of franchisees remain open after five years. If you looked at an independent operator, that might be 50%, currently it might be 80% closed because it’s so tough. But with a franchisee, if all goes wrong, the franchisor will buy you out, or find a way to keep that store open. They want to keep those numbers, and that’s certainly a little safety net for them,” Chaplin explains.

Is there room for all these brands?

While the UK is an attractive market at the moment can it last forever? Can all the new brands continue to compete with well established brands such as KFC and McDonalds. Can the new brands continue to compete with each other with similar offerings? For example, can Popeyes compete with Chic-Fil-A? The market is finite.

One thing driving the market at the moment, which suggests the possibility of over-saturation, is brands who open new sites in regional towns that do not have many existing fast food options. This can be a good move because it allows them to have a larger share of the business with fewer competitors. However, should too many brands open in smaller towns with less demand they will eventually oversaturate the market there and be forced to pull back.

“You don’t want four chicken brands opening up at the same time, but if you’re the first in then you’re going to capture that market, and you are the best thing in town, because people have then got to travel 10 miles to the big city to experience the Popeyes,” Chaplin states.

However, Chaplin does believe that these American brands could be helped by the fact that high street dining has, as he puts it, “died a death”, leaving more room for new brands. He also states that a lot of the new brands do well when it comes to online deliveries, so people are less likely to become tired of going to the same restaurants and brands as they aren’t experiencing the traditional way anymore.

Where does this leave the British QSR market?

The increase in American brands, coupled with the already existing wealth of them raises questions about the British QSR market, or lack thereof. For Chaplin, the British brands are behind but catching up. He believes that the American brands are 10 to 15 years ahead in terms of franchising and they have their systems “down to a T”. However, he thinks that the Brits have lots to offer and points to the continued success of Wagamama and Boss Pizza as two to watch out for in terms of global expansion.

“We always follow the US trends, we are just a little bit behind, but there will be brands from the UK, which make inroads elsewhere,” he says.