Navigating Challenges in the Fast-Food Sector: A Benchmarking Study Using Data Envelopment Analysis

Abstract

The research evaluates efficiency levels of nineteen major U.S. fast-food chains between 2020 and 2024 using Data Envelopment Analysis (DEA). This study evaluates how fast-food chain companies managed operational challenges during the pandemic and post-COVID-19 recovery by studying return on assets, EBITDA margin, capital utilization, and revenue growth metrics. Our findings show sharp differences in the performance of fast-food restaurant chains. DEA analysis reveals which companies demonstrate operational efficiency while pinpointing areas where others struggle such as capital management and revenue growth. The insights assist investors evaluate company performance and let management concentrate their efforts toward improvement. Particularly in sectors with low profit margins and changing consumer behavior, the DEA benchmarking methodology seems to be a good way to track operational efficiency and provide strategic direction.