NAICS 722513 Quarterly Industry Report
Limited-Service Restaurants
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 722513Sector: Accommodation and Food Services (72)Updated: Q1 2026
About This Report
This industry profile for Limited-Service Restaurants (NAICS 722513) draws on data from the U.S. Census Bureau Economic Census[6], Bureau of Labor Statistics[9], FDA food safety regulations[10], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, restaurant analysts, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the limited-service restaurants industry.
NAICS Sector
72
Accommodation and Food Services
Industry Definition & Overview
Limited-Service Restaurants (NAICS 722513) encompasses establishments primarily engaged in providing food services where patrons generally order or select items and pay before eating per the U.S. Census Bureau[5]. Food and drink may be consumed on premises, taken out, or delivered. This classification includes fast-food restaurants, pizza delivery shops, sandwich and sub shops, and similar counter-service food outlets.
The Census Bureau Economic Census[6] reports $253.6 billion in total revenue with roughly 4.5 million employees across the sector. Major brands operating in this space include McDonald's, Burger King, Subway, Chipotle, Chick-fil-A, and Panera Bread, alongside thousands of independent operators. Franchise operations account for a large share of total establishments, with franchise fees, royalties, and advertising fund contributions creating a distinct cost structure compared to independent operations.
Per the SBA Table of Size Standards[7], the size standard is $13.5 million in average annual receipts. Food cost ratios of 25 to 32 percent and labor costs of 25 to 30 percent are typical, with drive-through and digital ordering channels driving increasing shares of total revenue. Health department inspections, food handler certifications, and the FDA Food Code[8] govern food safety compliance. Labor competition with full-service restaurants and other sectors creates ongoing wage pressure, particularly for hourly kitchen and front counter staff positions across all geographic markets nationwide.
What's Included in This Industry
- Counter-service food ordering and payment processing operations
- Drive-through window service and vehicle queue management
- Fast food and quick-service meal preparation and assembly
- Pizza delivery and carryout restaurant operations
- Sandwich, sub, and wrap preparation and service
- Digital and mobile order processing and fulfillment systems
- Franchise compliance including brand standards, menus, and reporting
- Kitchen line operations and food assembly station management
- Third-party delivery platform integration and order management
- Health and food safety compliance including temperature monitoring and sanitation
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Accommodation and Food Services | 72 |
| Subsector | Food Services and Drinking Places | 722 |
| Industry Group | Restaurants and Other Eating Places | 7225 |
| NAICS Industry | Restaurants and Other Eating Places | 72251 |
| National Industry | Limited-Service Restaurants | 722513 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 722511 | Full-Service Restaurants | Full-Service Restaurants use table service with servers attending diners, creating a higher-labor-cost operating model that contrasts with the counter-service format of limited-service operations |
| 722514 | Cafeterias, Grill Buffets, and Buffets | Cafeterias and Buffets share the self-service dining concept but use a serve-yourself buffet line rather than the order-at-counter model typical of limited-service restaurants |
| 722515 | Snack and Nonalcoholic Beverage Bars | Snack and Nonalcoholic Beverage Bars serve lighter fare and beverages in a similar quick-service format, competing for snack and beverage spending between meal periods |
| 722330 | Mobile Food Services | Mobile Food Services prepare and serve quick meals from vehicles, competing for the same convenience-driven customers who frequent limited-service counter-service outlets |
| 722320 | Caterers | Caterers share food preparation capabilities and supply chains, with some limited-service restaurants offering catering trays and party platters as supplemental revenue lines |
| 311811 | Retail Bakeries | Retail Bakeries produce fresh baked goods sold to consumers, competing with limited-service breakfast and snack offerings through bakery cafe formats like Panera Bread |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 12.8% | 34,075 |
| 2 | Texas | 8.9% | 23,740 |
| 3 | New York | 6.7% | 17,879 |
| 4 | Florida | 5.8% | 15,395 |
| 5 | Illinois | 4.0% | 10,604 |
| 6 | Ohio | 3.9% | 10,311 |
| 7 | Pennsylvania | 3.7% | 9,703 |
| 8 | Georgia | 3.6% | 9,479 |
| 9 | North Carolina | 3.2% | 8,376 |
| 10 | Michigan | 2.9% | 7,738 |
% Of Establishments
0%
13%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
20,608
Total SBA Loans
$9.8B
Total Loan Volume
$477K
Average Loan Size
11 yrs
Average Loan Term
9.97%
Average Interest Rate
339,016
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[7], Limited-Service Restaurants (NAICS 722513) has a size standard of $13.5 million in average annual receipts for federal contracting purposes. SBA 7(a) loans[11] support franchise purchases, equipment upgrades, and working capital for qualifying independent and franchised quick-service restaurant operators. Additionally, 504/CDC loans[12] provide long-term, fixed-rate financing for major fixed assets such as real estate and equipment.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 1,184 | $1.2B | $998K |
| 2 | The Huntington National Bank | 3,016 | $777.4M | $258K |
| 3 | Newtek Bank, National Association | 976 | $430.0M | $441K |
| 4 | Celtic Bank Corporation | 336 | $279.9M | $833K |
| 5 | First Bank of the Lake | 232 | $202.4M | $872K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 722513?
NAICS 722513 covers establishments where patrons order or select items and pay before eating per the U.S. Census Bureau[5]. This includes fast-food restaurants, pizza delivery shops, sandwich and sub shops, and similar counter-service food outlets. Food may be consumed on premises, taken out, or delivered to customers. Table-service restaurants where patrons pay after eating are classified under NAICS 722511.
How large is the limited-service restaurant industry?
The Census Bureau Economic Census[6] reports $253.6 billion in total revenue with roughly 4.5 million employees. Major franchise brands including McDonald's, Subway, Chick-fil-A, and Chipotle operate alongside thousands of independent quick-service operators. The sector represents one of the largest employer categories in the U.S. economy by total headcount.
Should buyers choose franchise or independent restaurant operations?
Franchise operations provide brand recognition, proven operating systems, and marketing support but require initial franchise fees of $25,000 to $50,000 plus ongoing royalties of 4 to 8 percent of gross revenue per franchise disclosure documents. Independent operations offer greater menu and pricing flexibility with no royalty obligations. Franchise resales may command higher valuations due to brand recognition and system support. First-time buyers often benefit from franchise systems that provide structured training and operational playbooks.
What is the SBA size standard for limited-service restaurants?
Per the SBA Table of Size Standards[7], the size standard is $13.5 million in average annual receipts calculated over the preceding five fiscal years. SBA 7(a) loans commonly finance franchise purchases, equipment upgrades, and working capital needs. Multi-unit franchise operators may exceed this threshold across their combined locations.
What profit margins do limited-service restaurants achieve?
Food cost ratios of 25 to 32 percent and labor costs of 25 to 30 percent are typical per industry benchmarking data. Net profit margins of 6 to 9 percent are common for well-managed operations. Drive-through locations tend to achieve higher revenue per labor hour than dine-in-only formats. Digital ordering and loyalty program adoption have helped operators reduce transaction costs and increase average order values.
How do drive-through and digital ordering affect restaurant performance?
Drive-through windows generate 60 to 70 percent of total revenue at many quick-service locations per industry analysis. Digital and mobile ordering channels have grown rapidly, with app-based orders carrying higher average check sizes and lower labor cost per transaction. Integration of third-party delivery platforms expands the addressable customer base but carries commission costs of 15 to 30 percent that reduce margins on delivered orders.
What food safety requirements apply to limited-service operations?
Health department inspections conducted by local agencies enforce the FDA Food Code[8] standards for food handling, temperature control, and sanitation. Food handler certifications are required for employees in most jurisdictions. Franchise systems typically impose additional food safety protocols and audit requirements beyond local health department standards.
How are limited-service restaurants valued for acquisition purposes?
Franchise restaurant valuations typically apply multiples of 2.5 to 4 times EBITDA per industry transaction data, with brand strength, unit-level economics, and lease terms driving premiums within the range. Independent restaurants generally trade at lower multiples of 1.5 to 3 times SDE. Single-unit operators are valued differently from multi-unit portfolios, which may command scale premiums from institutional buyers and private equity firms assembling franchise platforms.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Census Bureau Economic Census data.census.gov
- [7]SBA Table of Size Standards sba.gov
- [8]FDA Food Code fda.gov
- [9]Bureau of Labor Statistics bls.gov
- [10]FDA food safety regulations fda.gov
- [11]SBA 7(a) loans sba.gov
- [12]504/CDC loans sba.gov
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