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BIJ
18,2 Benchmarking the service
quality of fast-food restaurant
franchises in the USA
282
A longitudinal study
Hokey Min
Department of Management, College of Business Administration,
Bowling Green State University, Bowling Green, Ohio, USA, and
Hyesung Min
Department of Tourism Management,
Yuhan University, Bucheon, South Korea
Abstract
Purpose – To help fast-food restaurants enhance their competitiveness and then increase their
market share, the purpose of this paper is to measure the service performances of fast-food restaurant
franchises in the USA and identify salient factors influencing the service performances of fast-food
restaurants over time.
Design/methodology/approach – This paper develops a set of benchmarks that helps fast-food
restaurants monitor their service-delivery process, identify relative weaknesses, and take corrective
actions for continuous service improvements using analytic hierarchy process and competitive gap
analysis.
Findings – This study reveals that a service attribute considered most important to the fast-food
restaurant customers’ impressions of service quality is taste of food. This preference has not been
changed over time. Also, we found a pattern of the correlation between the overall level of customer
satisfaction with the fast-food restaurant and its word-of-mouth reputation. Furthermore, we
discovered that the customers tended to be more favorable to easily accessible and national fast-food
restaurant franchises than less accessible, relatively new, and regional counterparts.
Research limitations/implications – The current study is limited to the evaluation of
comparative service quality in the USA. Thus, this study may not capture the national differences
in the restaurant customers’ perceived service quality.
Practical implications – For the last four decades, Americans’ obsession with fast serving, cheap
meals has made the fast-food restaurant a mainstay in their daily life. As the appetite for fast food
grows, every corner of the American Society has been infiltrated by fast-food restaurants. With the
increasing number of fast-food restaurants competing in the market, their survival often rests on
their ability to sustain high-quality services and meet changing needs/preferences of customers.
This paper provides practical guidelines for enhancing the competitiveness of the fast-food restaurant
franchise.
Originality/value – This paper is one of the first to compare the service quality of fast-food
franchises in the USA and develop dynamic service quality standards for fast-food restaurant
franchises using a longitudinal study.
Benchmarking: An International
Keywords Benchmarking, Fast-foods, Restaurants, Customer services quality,
Journal Analytical hierarchy process, United States of America
Vol. 18 No. 2, 2011
pp. 282-300 Paper type Research paper
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635771111121711

2. 1. Introduction Fast-food
Owing to gradual changes in American life styles, Americans now spend more money on restaurant
fast food than they do on higher education, personal computers, new cars, movies, books,
magazines, newspapers, videos, and recorded music (Schlosser, 1998). In 2004, America franchises
spent $148.6 billion on fast food and accounted for 64.8 percent of the fast-food sales of
the ten countries that consumed fast food most in the world. In other words, the average
American spends $492 per year on fast food (Workman, 2007). Despite the popularity of 283
fast food, fast-food restaurants have historically operated on slim-profit margins
ranging from 4 to 7 percent (Nessel, 2010). The low-profit margin of the fast-food
restaurant industry stemmed from the continuous wholesale-food price inflation. For
example, the wholesale-food price rose 7.6 percent in 2007 and 8.5 percent in 2008
(Wiki Analysis, 2009). To make it worse, the revenue of the US fast-food restaurant
industry declined by 4.7 percent in 2009, according to the IBIS World Industry Report
(2009). As such, fast-food restaurants have experienced intense competition in the recent
years due in part to the saturation of a fast-food restaurant market and the worldwide
economic downturn. With tighter profit margins and increasing competition, the
fast-food restaurant’s success depends heavily on its ability to retain customers
(i.e. restaurant patrons) by enhancing customer value or innovating service offerings.
Indeed, the longer customers remained with a particular fast-food restaurant, the more
profitable they became to the fast-food restaurant (Reichheld and Sasser, 1990; Lovelock
and Wright, 2002). According to Kotelikov (2008), a 2 percent increase in customer
retention has the same effect on profits as cutting costs by 10 percent. Similarly,
a 5 percent reduction in customer defection rate can increase profits by 25-125 percent.
Considering the significance of customer retention to the fast-food restaurant’s
profitability, the fast-food restaurant should adapt to the changing needs and preferences
(e.g. removal of trans-fats) of customers. For example, the recent hike in gasoline
prices may force some customers to dine at the nearby fast-food restaurant or make
fewer trips to the fast-food restaurant that is a greater distance from their neighborhood.
Also, those needs and preferences may represent various service attributes such as the
greater selection of healthy foods, value meals, fast drive-in services, better amenities,
24/7 access, and courteous/friendly employees. Once these service attributes are
revealed, the fast-food restaurant should identify what service attributes customers
consider most important and how well the fast-food restaurant is performing relative to
its competitors with respect to each of those salient service attributes. In an effort to help
the fast-food restaurant enhance its competitiveness that relies on the customer
perception of its overall service quality in comparison to other competitors, this paper
conducts a competitive benchmarking study that aims to translate customer service
requirements into comparative quality measures. Neely et al. (2005) noted that the most
beneficial form of benchmarking was competitive benchmarking because it focused on
the direct measurement of competitor performance and provided information on what
customers really wanted and what competitors were doing to meet customer needs.
Competitive benchmarking in the service sector is known to improve service
performance by as much as 60 percent in less than a year (Harrington and Harrington,
1996). Even though the application of competitive benchmarking to the service sector is
challenging due to the intangible nature of service quality and the subsequent lack of
universal service standards, competitive benchmarking has been successfully applied to
various service organizations such as hotels and restaurants (Morey and Dittman, 1995;

3. BIJ Min and Galle, 1996; Min and Min, 1996, 1997, 2002; Phillips and Appiah-Adu, 1998).
18,2 However, no prior literature but Min and Galle (1996) to date has reported
any benchmarking studies on fast-food restaurants. In fact, fast-food restaurant
benchmarking is not on the list of periodic service benchmarking studies conducted by
the Customer Service Benchmarking Association (2008). To fill the void left by prior
benchmarking studies, this paper addresses the following research questions:
284 RQ1. Which elements comprise customer service attributes that influence the
fast-food restaurant customer’s perception of service quality?
RQ2. Which service attributes are most important for customer satisfaction?
RQ3. Which fast-food restaurant is perceived to be the industry leader?
RQ4. How do we compare the fast-food restaurant’s service performance with that
of the industry leader using competitive gap analysis?
RQ5. How do we develop a strategic action plan for continuous service
improvement of the fast-food restaurant?
RQ6. How do the customer needs and preferences change over time and how
significantly do those changes affect the service performances of fast-food
restaurants?
2. Service attributes relevant to fast-food restaurant customers
The benchmarking process begins with the establishment of service standards through
identification of service attributes that comprise service standards.
Since serving customers better is the ultimate goal of benchmarking, we first identified
service attributes that are most important to fast-food restaurant customers. These service
attributes are derived from determinants of fast-food restaurant service quality identified
by Min and Galle (1996), Kara et al. (1997) and Tsai et al. (2007). Examples of these include:
taste of food, competitive price, service response time, cleanliness of the fast-food
restaurant, fast-food restaurant location, amenity, safety, employee courtesy, restaurant
operating hours, and the availability of healthy menus. Also, notice that this list includes
word-of-mouth restaurant reputation that may influence the diner’s fast-food restaurant
choice/patronage, but not necessarily the diner’s extent of satisfaction with the fast-food
restaurant (Ou and Abratt, 2006). Also, the contribution of these attributes to overall
customer satisfaction (or overall service quality of the fast-food restaurant) was measured
by the customer feedback that we solicited through the questionnaire survey.
To elaborate, the customer feedback was obtained from the sample of 262 fast-food
restaurant customers who have dined at ten different fast-food restaurants (McDonalds,
Burger King, Wendy’s, Arby’s, Hardee’s, Subway, Johnny Rocket, Red Robin,
Fuddruckers, and Roy Rogers) located in the southeastern and midwestern USA during
the period of January 2008 through November 2009. These fast-food restaurants were
chosen for the study because of their similar characteristics in terms of sizes, location,
menus, target customer bases, and service amenities (e.g. availability of children’s
playgrounds, drive-in services). For example, we did not include some popular fast-food
franchises such as Pizza Hut, Kentucky Fried Chicken, Taco Bell, and Long John Silver’s
which specialized in limited menu items such as pizzas, fried chickens, Mexican style
food, and fried seafood. On the other hand, despite being a casual dining restaurant,

4. Red Robin was still included in the study since its food offerings such as burgers and Fast-food
steak fries are similar to those of other restaurants under study and it has nationally restaurant
based franchises with approximately 400 restaurants all across the USA. Although the
sample that we chose is not reflective of the entire fast-food restaurant industry, we used franchises
this sample to illustrate how fast-food restaurant service standards can be set and how to
conduct the benchmarking process. Through a five-page questionnaire survey, the
participants provided us with data related to their demographic profile (e.g. gender, 285
marital status, age), frequency of their fast-food restaurant visits, the patronage
behavior, the relative importance of service attributes to overall fast-food restaurant
service quality, and the level of customer satisfaction based on their service experiences.
Some of the non-demographic questions were selected from service attributes
´
considered to be critical to service quality (Vazquez et al., 2001; Lovelock and Wright,
2002; Min, 2006).
The Statistical Packages for Social Sciences (SPSS) for Windows (2008) were used to
analyze the data collected from this sample. All of the participants reported having
visited at least one of the seven fast-food restaurants for this study. In fact, a majority
(72.4 percent) of the participants said that they visited one of these fast-food restaurants
at least once a week in the past. A vast majority (94.3 percent) of them reported having
dined at one of these fast-food restaurants at least once a month. More than two-thirds
(70.2 percent) of them spent an average of $5 or more per visit. Most of the survey
participants are frequent diners of the fast-food restaurants. Among these, roughly half
(50.4 percent) of them patronize a particular restaurant; thus are familiar with fast-food
restaurant service quality.
In particular, these participants were carefully selected to maximize responses to the
survey. Rather than distributing the questionnaire to the potential participants through
the mail, six surveyors (the author plus five hired graduate assistants) approached a
group of people who had just dined at the fast-food restaurant, or handed out the
questionnaire to the restaurant diners through local church organizations, university
classes, and apartment complexes where the surveyors resided. Occasionally, a souvenir
item (e.g. pen, notepad) with a nominal value was offered to the reluctant participants to
encourage them to fill out the questionnaire. The rationale for the use of this survey
method is a potential increase in survey responses by face-to-face interactions with
potential respondents. In fact, low-response rates are an ongoing concern in conducting
traditional mail surveys (Greer et al., 2000; Larson and Poist, 2004). For mail surveys,
response rates in the neighborhood of 10-20 percent are not uncommon (Yu and
Cooper, 1983; George and Mallery, 2001). Thus, to avoid the potential non-response bias,
we directly approached and asked restaurant diners to answer the structured
questionnaire. Also, we solicited survey participation from a number of different
locations (e.g. churches, universities, residential areas) to increase sample size. However,
notice that the geographical coverage of this direct contact survey can be still limited.
The results of the survey revealed that there were a total of 15 service attributes that
were considered relevant to fast-food restaurant service quality. These salient attributes
were identified based on importance ratings provided by the respondents who were
being asked to indicate how important a given attribute is to them in gauging the level of
their satisfaction with service quality. Myers (1999) suggested that importance ratings
were one of the most straightforward but effective ways of measuring customer
satisfaction and determining the relative importance of service attributes

5. BIJ to service quality. As summarized in Table I, the attribute considered most important in
18,2 forming a perception of fast-food restaurant service quality is taste of food. The next four
most important attributes were cleanliness of the fast-food restaurant, service response
time, competitive price, and quality of prior service. These results are consistent with
those of other service quality studies such as Crawley (1993), Babin and Darden (1996),
Min and Galle (1996) and Miranda et al. (2005) indicating that facility atmospherics such
286 as cleanliness of the fast-food restaurant can lift the mood of the diners and may impel
them to visit more. Similarly, Dijksterhuis et al. (2005) argued that subtle environment
cues such as cleanliness of the fast-food restaurant might unconsciously affect the
restaurant customer’s dining behavior. Also, as expected, competitive price turned out to
be a central influence on fast-food restaurant service quality. This finding is congruent
with that of Curry and Riez (1988) indicating that the price paid for the food significantly
influences the customer’s service experience.
On the other hand, word-of-mouth reputation, amenity, proximity to a
highway/major road, safety, and health food offering were considered relatively
unimportant. It is interesting to note that, unlike other service settings such as hotels,
employee courtesy was not a deciding factor for fast-food restaurant service quality.
This finding may be due to the fact that hotels primarily sell intangible experience
through their employees’ direct interactions with customers, whereas fast-food
restaurants primarily sell instant meals without much involvement of their employees.
Relative insignificance of employee courtesy to overall service quality of the fast-food
restaurant may be due to limited face-to-face interactions with employees resulting
from the increased use of drive-in service. Indeed, more than two-thirds (67.9 percent)
of our survey respondents reported using drive-in service.
Another finding was that four out of the six most important attributes seemed to
represent “functional service.” Functional service refers to service attributes that are
Average degree of importance Ranks
Service attributes 2009 (n ¼ 262) 1994 (n ¼ 111) 2009 1994
Taste of food 1.31 (0.520) 1.31 (0.49) 1 1
Cleanliness 1.63 (0.693) 1.48 (0.83) 2 2
Service response time 1.75 (0.714) 1.69 (0.72) 3 3
Competitive price * 1.77 (0.762) 2.12 (0.88) 4 5
Quality of prior service 1.86 (0.795) 1.67 (0.77) 5 4
Proximity to a customer’s residence * 1.97 (0.787) 2.46 (0.94) 6 8
Proximity to a customer’s school/workplace * 2.08 (0.827) 2.42 (1.05) 7 7
Employee courtesy 2.15 (0.807) 2.15 (0.97) 8 6
Operating hours 2.18 (0.922) 9
Variety of food * 2.34 (0.878) 2.70 (0.97) 10 10
Safety 2.39 (1.138) 11
Healthy food 2.42 (1.102) 12
Proximity to a highway exit or major road 2.71 (1.088) 13
Amenity 2.75 (1.110) 14
Word-of-mouth reputation 2.84 (1.066) 2.66 (0.93) 15 9
Table I.
Attributes for the Notes: *Difference is statistically significant at: a ¼ 0.05; scale: 1 – extremely important, 2 – somewhat
fast-food restaurant important, 3 – neither important nor unimportant, 4 – somewhat unimportant, 5 – not at all important;
service quality numbers in parentheses are standard deviations

6. akin to attributes of a product (e.g. food) and/or can be improved without direct reference Fast-food
to customers (Chakrapani, 1998). This category of the service attributes includes taste of restaurant
food, cleanliness of the restaurant, competitive price, and restaurant location (proximity
to a customer’s residence). On the other hand, “personal service” refers to service franchises
attributes that are difficult, if not impossible, to improve without reference to customers
(Chakrapani, 1998). This category of the service attributes includes service response
time, employee courtesy, restaurant operating hours, amenity, and safety. 287
To see if the 15 service attributes could be broken down into sub-categories,
we conducted exploratory factor analysis. The exploratory factor analysis was preceded
by the Bartlett’s test of Sphericity. The Bartlett’s test (with a x2 value of 729.452) showed
that some of these service attributes were significantly correlated among themselves.
The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was also employed to
measure the strength of the relationship among service attributes. A factor analysis was
further justified, since the KMO value of 0.744 was greater than a threshold score of 0.70.
Considering the statistical significance of correlation among these service attributes,
we conducted principal component analysis to determine the minimum number of
common factors needed to explain correlation among the attributes using the eigen value
greater than one rule. To obtain a more meaningful representation of the factor structure,
we used the varimax rotation with Kaiser Normalization. To elaborate, varimax rotation
is an orthogonal rotation of the factor axes to maximize the variance of the squared
loadings of a factor (column) on all the variables (rows) in a factor matrix where each
factor tends to have either large (close to 1) or small (close to 0) loadings of any particular
variable (Kaiser, 1958; Fabrigar et al., 1999). In particular, we chose a varimax rotation
because it enables us to easily identify each variable with a single common factor.
As summarized in Table II, we extracted five common factors:
Factors Factor 1 Factor 2 Factor 3 Factor 4 Factor 5
Factor label Service Menu Location Accessibility Drawing
image selection power
Eigen value 3.537 1.688 1.394 1.155 1.014
Percent of variance 23.583 11.252 9.295 7.702 6.758
Variables
Cleanliness 0.592 0.428 0.155 0.006 0.012
Service response time 0.753 20.015 0.132 0.037 20.096
Employee courtesy 0.783 0.260 0.033 0.009 0.052
Quality of prior service 0.664 0.140 0.047 0.231 0.069
Healthy food 0.062 0.740 2 0.112 2 0.064 0.103
Variety of food 0.151 0.540 0.050 0.198 0.296
Word-of-mouth reputation 0.116 0.502 0.174 0.454 20.076
Safety 0.275 0.617 0.044 0.106 20.127
Proximity to a customer’s residence 0.176 20.151 0.748 0.027 0.195
Proximity to the school or workplace 0.054 20.014 0.871 0.038 0.005
Proximity to a highway or major road 0.062 0.300 0.590 0.233 20.032
Amenity 0.113 0.139 0.109 0.726 20.008
Operating hours 0.049 20.019 0.041 0.793 0.137
Taste of food 0.366 20.271 0.018 0.229 0.507 Table II.
Competitive price 2 0.145 0.226 0.129 2 0.010 0.819 Factor analysis results
of service attributes for
Note: A KMO measure of sampling adequacy ¼ 0.744 fast-food restaurants

7. BIJ (1) service image;
18,2 (2) menu selection;
(3) location;
(4) accessibility; and
(5) drawing power.
288
These factors are found to have an eigen value greater than 1. That is to say, the result
of the factor analysis verified that the 15 service attributes could be classified into five
categories of services:
(1) service image;
(2) menu selection;
(3) location;
(4) accessibility; and
(5) drawing power.
3. The development of service standards
To stay competitive, a fast-food restaurant must establish proper service standards in
relation to its customers’ needs and expectations. With this in mind, the survey
participants were asked to rate on a five-point Likert scale the service performance of the
six fast-food restaurants with respect to 15 attributes listed in Table I. These fast-food
restaurants are: McDonalds, Burger King, Wendy’s, Subway, Arby’s, and Hardee’s.
A rating of the service performance of the fast-food restaurants was used to determine a
leading fast-food restaurant (benchmark) which best exhibits each service attribute and
provides its customers with the highest overall service quality. To develop an objective
service standard, the raw ratings were converted to relative priority scores using an
analytic hierarchy process (AHP) introduced by Saaty (1980). AHP is a systematic
scoring method that was designed to synthesize the fast-food restaurant customers’ level
of satisfaction with each service attribute into an overall service performance score of
each fast-food restaurant. Accordingly, AHP helps the fast-food restaurant not only
identify the principal competitors in the market, but also assess the service performance
of the fast-food restaurant relative to its competitors. In contrast with the SERVQUAL
instrument suggested by Berry et al. (1985), AHP permits the fast-food restaurant
manager to investigate the sensitivity of the service performance measure to changes in
customer perception of importance of service attributes and the customer’s degree of
satisfaction with those attributes (Min and Min, 1996). Furthermore, AHP can enhance
the fast-food restaurant manager’s ability to make tradeoffs among various quantitative
(e.g. price, restaurant operating hours, quick response time) and qualitative attributes
(e.g. cleanliness, employee courtesy, safety) (Saaty, 1988). The application of
benchmarking to fast-food restaurants involves four major steps (Wind and Saaty,
1980; Zahedi, 1989; Min and Min, 1996):
(1) Break down the service-evaluation process into a manageable (e.g. no more than
seven) set of criteria and attributes and then structure these into a hierarchical
form.
(2) Make a series of pairwise comparisons among the criteria and attributes
according to the customers’ satisfaction level with service performances.

8. (3) Estimate the relative weights of service criteria and attributes based on the Fast-food
customers’ perceived importance of those criteria and attributes. Also, determine restaurant
the local priority scores and ranks of the respective fast-food restaurant in terms
of their service performances. franchises
(4) Aggregate these local priority scores and synthesize them for the overall
measurement of fast-food restaurant service quality. Then, identify the
best-practice (leading) fast-food restaurant. 289
Based on the above steps, the process of benchmarking was structured into five levels
(Figure 1). Since this hierarchical representation eases the complexity of analysis
through decomposition, it aids the fast-food restaurant in understanding the interactions
among various service criteria and attributes. As shown in Figure 1, the top level of a
hierarchy represents the ultimate goal of determining the best-practice fast-food
restaurant. At the second level of a hierarchy, the five distinctive service criteria:
(1) service image;
(2) menu selection;
(3) location;
(4) accessibility; and
(5) (customer) drawing power
were placed because they are generally considered important in measuring the
fast-food restaurant service quality.
The attributes belonging to one of the five service criteria were connected to the
bottom level of the hierarchy represented by six fast-food restaurants under evaluation.
4. The service performance evaluation of fast-food restaurants
For illustrative purposes, we considered the base-line scenario involving six fast-food
restaurants for their service performances relative to others. Under this scenario,
we estimated relative weights of criteria, and attributes and then derived priority scores
of each fast-food restaurant with respect to the given criteria, and attributes through a
series of pairwise comparisons. Herein, relative weights represent fast-food restaurant
customers’ perceived importance of each criterion and attribute. As indicated earlier,
these weights were determined primarily based on the surveyed opinions of fast-food
restaurant customers. Since these customers’ perception of service quality can be
subjective and inconsistent, we estimated the degree of consistency in the customers’
opinions using a consistency ratio (CR), that is mathematically expressed as:
CI
CR ¼ ;
RI
where CI ¼ consistency index, RI ¼ random index:
ðlmax Þ
CI ¼
n21
lmax ¼ maximum eigen value of the matrix of pairwise comparisons;
n ¼ number of criteria or attributes in the consideration; and
RI ¼ mean CI of a randomly generated reciprocal matrix from a ratio scale of 1-9.

9. BIJ
18,2
290
Figure 1.
restaurants
Hierarchy of
benchmarking fast-food
Goal: Competitive benchmarking of fast-food restaurants
Criteria
Service Image Menu selection Location Accessibility Drawing power
(0.218) (0.161) (0.178) (0.163) (0.280)
Attributes Attributes Attributes Attributes Attributes
Cleanliness Healthy food Proximity to Taste of food
(0.280) residence Amenity
(0.256) (0.442) (0.575)
(0.374)
Service
response Variety of Proximity to
workplace Store operating Competitive
time (0.261) food (0.265)
(0.354) hours (0.558) price (0.425)
Employee Word of mouth
courtesy Proximity to
reputation
(0.213) a highway
(0.219)
(0.272)
Quality of
Safety
prior service
(0.260)
(0.246)
Alternatives
McDonald’s Wendy’s Burger king Subway Arby’s Hardee’s
Note: Numbers in parentheses represent given weights

10. The relative weights and consistency ratios were calculated using the AHP software Fast-food
called Expert Choice (2000) program. Also, the AHP enabled us to derive the priority restaurant
scores from the customers’ satisfaction level with services rendered to them during their
visitation of the fast-food restaurant. These scores, however, are not absolute measures franchises
(raw scores), but relative measures that represent the service performance of the
fast-food restaurant relative to its competitors. Thus, pairwise comparisons were
intended to derive numerical values (relative measures) from a set of fast-food restaurant 291
customers’ judgments, rather than arbitrarily assigning numerical values to criteria and
attributes. These pairwise comparisons of fast-food restaurants produced a final
ranking of fast-food restaurants with respect to their service performance relative to
others. Since all of these pairwise comparisons are tested against pre-assigned
consistency ratios, consistency is ensured with an overall consistency index of 0.00.
It should be noted that a consistency ratio of 0.10 or less is generally considered
acceptable (Saaty, 1980).
The detailed results of the comparative performances of fast-food restaurants with
respect to each service attribute are summarized in Table III. These results show that
McDonalds tops the list in terms of overall service quality. In particular, McDonalds is
the leader in terms of service response time, location, amenity, operating hours, and
competitive price. However, Subway turns out to be the service leader with respect to
cleanliness, employee courtesy, quality of prior service, healthy food, a variety of food,
word-of-mouth reputation, safety, and taste of food. Aggregation of local priority scores
into global priority scores (overall service quality metrics) indicated that McDonalds and
Wendy’s ranked highest and second highest, respectively (Table IV). McDonalds is
considered the best-practice fast-food restaurant (benchmark) in terms of its overall
service quality. On the other hand, it is intriguing to note that despite some strengths,
Subway is ranked third best in terms of its overall service quality since it fell behind
several other restaurants with respect to service response time, competitive price,
operating hours, and location (Table V). Regardless, as shown in Table VI, both
McDonalds and Subway were the two most popular restaurants in terms of the
frequency of their visits. Especially, Subway’s popularity grew dramatically for the last
15 years, whereas both Burger King and Hardee’s suffer from declining popularity.
Subway’s increased popularity may stem from its continuous service improvement in
cleanliness, employee courtesy, taste of food, and a variety of food, although its apparent
weakness is relatively high price of food and slow response time as compared to
McDonalds, Wendy’s and Burger King.
To see if a fast-food restaurant ranking changes in accordance with the changes in
relative importance of service attributes such as taste of food, competitive price, and
location convenience, we performed a series of sensitivity analyses for all the attributes.
We discovered that, irrespective of changes in a relative weight of the importance of
service image, location, and accessibility, McDonalds would be a superior fast-food
restaurant to the others including Wendy’s and Subway. On the other hand, if a relative
weight of taste of food increased from a given weight of 0.575 to 0.850, both Subway and
Wendy’s were preferred to McDonalds. Table VII shows that a ranking of the fast-food
restaurants is sensitive to changes in the importance of taste of food and competitive
price, whereas it is insensitive to quality of prior service, variety of food, healthy food,
safety, proximity to a workplace/school and a highway. These results imply that service
attributes such as taste of food and competitive price can be key differentiators

11. BIJ
18,2 Criteria Attributes Restaurants Priority scores Ranks
Service image Cleanliness Subway 0.01202 1
McDonalds 0.01089 2
Wendy’s 0.01018 3
Arby’s 0.01036 4
292 Burger King 0.00944 5
Hardee’s 0.00812 6
Service response time McDonalds 0.01226 1
Wendy’s 0.01092 2
Burger King 0.01000 3
Subway 0.00863 4
Arby’s 0.00797 5
Hardee’s 0.00705 6
Employee courtesy Subway 0.00865 1
Arby’s 0.00807 2
McDonalds 0.00800 3
Wendy’s 0.00766 4
Burger King 0.00741 5
Hardee’s 0.00646 6
Quality of prior service Subway 0.01048 1
Wendy’s 0.00998 2
McDonalds 0.00967 3
Arby’s 0.00852 4
Burger King 0.00849 5
Hardee’s 0.00634 6
Menu selection Healthy food Subway 0.00757 1
Wendy’s 0.00720 2
Arby’s 0.00719 3
McDonalds 0.00682 4
Burger King 0.00682 4
Hardee’s 0.00568 6
Variety of food Subway 0.00833 1
Wendy’s 0.00785 2
McDonalds 0.00732 3
Arby’s 0.00715 4
Burger King 0.00666 5
Hardee’s 0.00539 6
Word-of-mouth reputation Subway 0.00770 1
Wendy’s 0.00645 2
McDonalds 0.00642 3
Burger King 0.00573 4
Arby’s 0.00530 5
Hardee’s 0.00358 6
Safety Subway 0.00714 1
Wendy’s 0.00714 1
Burger King 0.00714 1
Arby’s 0.00714 1
McDonalds 0.00681 5
Hardee’s 0.00642 6
Table III. Location Proximity to a customer’s residence McDonalds 0.01455 1
Local priority scores of Wendy’s 0.01322 2
fast-food restaurants (continued)

12. Criteria Attributes Restaurants Priority scores Ranks
Fast-food
restaurant
Subway 0.01191 3
Burger King 0.01153 4
franchises
Arby’s 0.00874 5
Hardee’s 0.00677 6
Proximity to a customer’s school/workplace McDonalds 0.01217 1 293
Wendy’s 0.01217 1
Burger King 0.01217 1
Subway 0.01035 4
Arby’s 0.00962 5
Hardee’s 0.00669 6
Proximity to a highway or major roads McDonalds 0.00898 1
Wendy’s 0.00898 1
Burger King 0.00898 1
Subway 0.00808 4
Arby’s 0.00718 5
Hardee’s 0.00628 6
Accessibility Amenity McDonalds 0.01337 1
Subway 0.01239 2
Wendy’s 0.01209 3
Burger King 0.01205 4
Arby’s 0.01200 5
Hardee’s 0.01009 6
Operating hours McDonalds 0.01855 1
Wendy’s 0.01821 2
Burger King 0.01652 3
Subway 0.01419 4
Arby’s 0.01260 5
Hardee’s 0.01087 6
Drawing power Taste of food Subway 0.03405 1
Wendy’s 0.02898 2
Arby’s 0.02766 3
McDonalds 0.02658 4
Burger King 0.02534 5
Hardee’s 0.01834 6
Competitive price McDonalds 0.02776 1
Wendy’s 0.02303 2
Burger King 0.02082 3
Subway 0.01827 4
Hardee’s 0.01499 5
Arby’s 0.01424 6 Table III.
for enhancing the fast-food restaurant’s competitiveness. For instance, sales promotions
through deep discounts and value-meal coupons can attract more customers. By the
same token, improvement of taste of food through the use of better quality meat and
fresh ingredients may enhance the fast-food restaurant’s competitive position.
5. Managerial implications and recommendations
In today’s saturated fast-food restaurant market, mere compliance with past service
standards will not result in the level of improvement necessary to become

13. BIJ
Overall priority scores
18,2 obtained from AHP
(overall consistency
index ¼ 0.00) Ranks
Restaurants 2009 1994 2009 1994 Overall level of customer satisfactiona
294 McDonalds 0.190 0.161 1 2 1.94 (0.870)
Wendy’s 0.184 0.163 2 1 1.88 (0.782)
Subway 0.180 0.155 3 3 1.79 (0.910)
Burger King 0.169 0.145 4 4 2.21 (0.937)
Arby’s 0.154 0.132 5 6 2.20 (0.898)
Red Robin Not applicable 2.55 (0.779)
Johnny Rocket Not applicable 2.79 (0.707)
Fuddruckers Not applicable 2.89 (0.552)
Hardee’s 0.123 0.134 6 5 2.96 (0.691)
Roy Rogers Not applicable 3.00 (0.403)
Table IV. Notes: aThe numbers represent the average score of a five-point scale for the degree of
Comparison of fast-food customer satisfaction evaluated by the respondents where: 1 – very satisfied, 2 – somewhat satisfied,
restaurants with respect 3 – neither satisfied nor dissatisfied, 4 – somewhat dissatisfied, 5 – very dissatisfied; the numbers in
to overall service quality parentheses are standard deviations
Average frequency of visits Ranks
Restaurants 2009 (n ¼ 262) 1994 (n ¼ 111) 2009 1994
McDonalds 2.01 (0.859) 2.10 (0.97) 1 2
Subway * 2.07 (0.881) 3.32 (0.90) 2 6
Wendy’s 2.12 (0.862) 2.02 (0.82) 3 1
Burger King * 2.56 (0.891) 2.12 (0.92) 4 3
Arby’s 2.85 (0.847) 2.92 (0.88) 5 5
Red Robin 3.59 (0.642) 6
Johnny Rocket 3.73 (0.532) 7
Fuddruckers 3.79 (0.525) 8
Hardee’s * 3.79 (0.468) 2.32 (0.67) 9 4
Roy Rogers 3.92 (0.317) 10
Table V. Notes: *Difference is statistically significant at: a ¼ 0.05; scale: 1 – most frequently visited, 2 –
The popularity of the occasionally visited, 3 – rarely visited, 4 – never visited; numbers in parentheses are standard
fast-food restaurant deviations
the “best-of-breed” fast-food restaurant. In other words, fast-food restaurants need to
achieve service excellence by constantly improving service performances. Fast-food
restaurants cannot improve service performances unless they understand what
the leading competitors do in the market and what level of service gaps exists between
current performances and best practices. They also need to cater their service offerings
to the dynamically changing preferences and needs of their customers over time.
Thus, we proposed dynamic benchmarking as an effective way of sustaining service
excellence. This section summarizes several major findings of the current benchmarking
study as compared to the previous benchmarking study conducted in 1994,

14. Fast-food
Competitive gapsb
Benchmarka restaurant
Key attributes (McDonalds) Wendy’s Subway Burger King Arby’s Hardee’s franchises
Service image
Cleanliness 2.14 0.15 * * 20.20 * 0.33 * 1.12 * 0.73 *
Service response time 1.64 0.20 * 0.69 * 0.47 * 1.21 * 1.21 * 295
Quality of prior service 1.94 20.06 20.15 * * 0.27 * 0.26 * 1.02 *
Employee courtesy 2.27 0.10 0.17 * 0.18 * 1.41 * 0.54 *
Menu selection
Variety of food 2.22 20.15 * * 20.27 * 0.22 * 0.66 * 0.79 *
Word-of-mouth 2.17 20.01 20.36 * 0.26 * 0.43 * 1.72 *
Location
Proximity to residence 1.49 0.15 * 0.33 * 0.39 * 1.02 * 1.71 *
Accessibility
Operating hours 1.63 0.03 0.40 * 0.20 * 0.77 * 1.15 *
Amenity 2.28 0.22 * 0.18 * 0.25 * 0.24 * 0.74 *
Drawing power
Taste of food 2.05 20.17 * 20.45 * 0.10 20.08 0.92 *
Competitive price 1.56 0.32 * 0.81 * 0.48 * 1.48 * 1.33 *
Notes: Statistically significant at: *a ¼ 0.05, * *a ¼ 0.10; athe benchmark index represents
the average score of a five-point scale for the degree of customer satisfaction where: 1 – extremely
satisfied, 2 – somewhat satisfied, 3 – neither satisfied nor dissatisfied, 4 – somewhat dissatisfied, 5 – not Table VI.
at all satisfied; bthe positive gap occurs when the service performance of a given restaurant is worse than Competitive gap analysis
that of its benchmark (McDonalds) of fast-food restaurants
expounds the managerial implications of those findings, and develops practical
guidelines for continuous service improvement.
First, we discovered that a service attribute considered most important to the
fast-food restaurant customers’ impressions of service quality is taste of food. Also,
the effect of “atmospheric” impression such as cleanliness of the restaurant seems to be
significant, because cleaner dining environments may look more sanitary to the
customers. That is to say, neatly cleaned tables, chairs, and floors in the fast-food
restaurant can play a significant role in improving its customers’ impressions of service
quality and thereby retaining its customers. It is also not surprising to find that people go
to the fast-food restaurant due to its quick service response time. Thus, the relative
importance of these service attributes to the fast-food restaurant customers’ impressions
of service quality virtually remains the same as the 1994 study. On the other hand, the
restaurant customers tend to value competitive price significantly more than they did in
1994 (Table I). Also, the fast-food restaurant customers were very sensitive to price
changes (Table VII). This finding indicates that the fast-food restaurant customers are
still looking for bargain or value meals. In particular, in this era of worldwide economic
crisis and rising food prices, a significant price increase without noticeable improvement
in taste of food and physical restaurant environments can undermine the fast-food
restaurant’s competitiveness. Thus, we recommend that the fast-food restaurant should
focus more on “every-day low price” strategy than on “occasional coupon or promotional
sales” to obviate customer defections and phantom demand. Another intriguing finding
is that the fast-food restaurant customers tend to take restaurant location (namely,
proximity to their residences, schools, and workplaces) far more seriously than before.

15. BIJ
Service attributes Degree of sensitivity
18,2
Service image
Cleanliness Somewhat insensitive
Service response time Somewhat sensitive
Employee courtesy Somewhat insensitive
296 Quality of prior service Insensitive
Menu selection
Variety of food Insensitive
Healthy food Insensitive
Safety Insensitive
Word-of-mouth reputation Somewhat insensitive
Location
Proximity to residence Somewhat insensitive
Proximity to school/workplace Insensitive
Proximity to highway Insensitive
Accessibility
Amenity Somewhat insensitive
Operating hours Somewhat insensitive
Drawing power
Taste of food Sensitive
Competitive price Sensitive
Notes: “Very sensitive” – a ranking of all the restaurants changes drastically in the entire weight
range; “sensitive” – a ranking of several restaurants changes constantly in the entire weight range;
Table VII. “somewhat sensitive” – a ranking of two restaurants changes gradually in the limited weight range;
Sensitivity analysis of “somewhat insensitive” – a ranking of one restaurant changes gradually in the very limited weight
service attributes range; “insensitive” – a ranking of no restaurant changes in the entire weight range
This pattern reflects the fact that, with rising gasoline prices in times of a severe
economic downturn, the restaurant customers prefer to dine at the restaurant not too
distant from their home, school, or workplace.
Second, as expected, the overall leader (i.e. McDonalds) of fast-food restaurant
service quality turned out to be the most frequently visited restaurant (Table V). In fact,
we discovered some correlation between the relative service performance of the
fast-food restaurant and its popularity (Tables IV and V). Similarly, we found a pattern
of the correlation between the overall level of customer satisfaction with the fast-food
restaurant and its word-of-mouth reputation as evidenced by the top three rankings of
Subway, Wendy’s, and McDonalds (Tables III and IV). That is to say, fast-food
restaurant branding can foster positive images of its service quality and subsequently
help attract more customers in the future. Thus, this finding reaffirms earlier
discoveries by Ou and Abratt (2006) and Balmer (2001) that word-of-mouth reputation
or branding could have a long-lasting impact on patronage, competitiveness, and
business survival. Also, our survey result indicated that nearly half (43.7 percent)
of the surveyed customers, who were disappointed with the service quality of a
fast-food restaurant, would not return to the same fast-food restaurant. Thus,
sustaining the high level of service quality is essential for customer retention. More
importantly, it should be reminded that good branding has a lasting impact on the
customer’s loyalty to a particular fast-food restaurant. Indeed, Rhee and Bell (2002)
observed that many customers had a primary affiliation to a “primary store” that

16. captured the majority of their purchases despite being presented with a significant Fast-food
inducement to shop elsewhere. Thus, we recommend that the fast-food restaurant restaurant
should develop a long-term branding strategy to prevent service failures and foster its
nice images. Such a strategy may include: recognition of loyal patrons by their first franchises
names, special coupons/discounts or free meals/drinks for repeated visitors, and quick
attention to service failures (e.g. customer complaints).
Third, the customers tend to be more favorable to easily accessible and national 297
fast-food restaurant franchises such as McDonalds, Wendy’s, and Subway than less
accessible, relatively new, and regional counterparts such as Roy Rogers, Hardee’s,
Fuddruckers, Johnny Rocket, and Red Robin. This tendency may have something to do
with the risk-averse trend of today’s customers who do not want to dine at the
unfamiliar restaurants. As a matter of fact, half (50.4 percent) of the surveyed
customers reported patronizing the same restaurant for repeated visits. Also, given the
increasing importance of location to the restaurant service quality, less accessible
restaurants such as Roy Rogers (primarily located near the major highway exits or rest
areas) and Hardee’s with the limited number of establishments may suffer from the
declining popularity. For example, the Hardee’s popularity has significantly declined
over the years (Table V). Considering this finding, we recommend that relatively new
and regional fast-food restaurants should locate their establishments near to the cluster
of other competing restaurants such as McDonalds and Wendy’s to negate their
competitor’s locational advantage and then draw the attention of potential customers.
As summarized above, this study incorporated the customers’ perception of service
quality into the fast-food restaurant benchmarking process and then evaluated “what-if”
scenarios associated with changes in the customers’ perception of service quality
(i.e. changes in relative importance of service attributes) using the AHP. Although
the current study was one of the first longitudinal studies to evaluate the comparative
service performances of the fast-food restaurants over time, it can be extended to include
large samples in different regions across the USA. Similarly, this study can be extended
to include samples from different countries and then conduct cross-cultural studies to
examine any cross-cultural differences in the customer perception of fast-food
restaurant service quality. Also, future studies can be directed toward the identification
of various latent variables (e.g. diners’ gender, age, profession, ethnicity) that may
influence the diners’ perception of restaurant service quality using the structural
equation model.
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300 Corresponding author
Hokey Min can be contacted at: hmin@bgsu.edu
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