Quarterly Concept Dashboard 2Q:14 Benchmarking for $1B+ Chains and Other Select Concepts System Stats, Unit Sales & Margins, Build Costs, Valuations Casual Buffalo Wild Wings Cheesecake Factory Chili's Grill & Bar Long Horn Olive Garden Outback Red Lobster Red Robin Ruby Tuesday Texas Roadhouse TGI Friday's Family Bob Evans Cracker Barrel Denny's IHOP Perkins Fast Casual Chipotle Corner Bakery Panera Bread Qdoba Sandwich Arby's Burger King Carl's Jr. Chick-fil-A Five Guys Hardee's Jack in the Box McDonald's Sonic Drive-In Taco Bell Wendy's Zaxby's Sub-sandwich Firehouse Subs Jimmy John's Quizno's Subway Pizza Domino's Little Caesar's Papa John's Pizza Hut Chicken Church's KFC Popeyes Coffee/Bakery Dunkin Donuts Krispy Kreme Starbucks Tim Horton's Copyright: This Restaurant Research LLC document is copyrighted material. Due to the No Electronic Theft (NET) Act of 1997, electronic forwarding or other forms of redistribution, without the express permission of Restaurant Research LLC, are violations of law and could be subject to fines of up to $250,000 and up to five years of imprisonment, even when no financial gain or commercial advantage accrues to the forwarder/re-distributor. Copyright 2014 Restaurant Research LLC. All rights reserved. Disclosure: Restaurant Research LLC often sells report subscriptions to concepts under our coverage. Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research s analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment.
Avg./Total U.S. System Scale Store Level Labor Structure System Sales ($'000) - 2013 $4,530,000 $28,144,500 Total Salaried Employees 4-5 Market Share by Sales - 2013 16.1% Total Hourly/Crew Employees 70-90 Market Share by Sales - 2004 19.0% Average Employees @ Peak Shift 30-40 System Units - 2013 1,861 9,129 Pre-Opening Labor Hours/Day 15-25 Market Share by Units 20.4% Total Salaried Labor Hours/Day 45-55 Growth Total Crew Labor Hours/Day 270-290 System Sales 2 Yr. Avg. 1.0% 2.9% Unit Economics Dec-13 System Sales 10 Yr. Avg. 2.6% 4.3% Average Unit Volume "AUV" $2,432,352 $3,768,280 COGs 26.3% 28.0% Gross New Units 2 Yr. Avg. 1.1% 2.9% Labor 32.1% 31.4% Gross New Units 10 Yr. Avg. 3.1% 5.1% EBITDAR 18.6% 18.1% Same-Store-Sales 2 Yr. Avg. 0.5% 0.8% 10 Yr. Avg. 0.0% 0.2% Unit Level M&A Multiple 5.18 4.80 RR SSS Index (Base Yr. 2000) 110.6 109.2 New Build AUV $2,600,000 $3,373,500 Unit Closures New Build Costs (Ex. Land) $2,273,900 $3,024,590 Building Size (Sq. Ft.) 5,410 6,429 2 Yr. Avg. 1.3% 1.3% Sales-to-Investment Ratio 1.14 1.12 10 Yr. Avg. 1.1% 1.2% Sales/Sq. Ft. $480.6 $524.7 Unit Transfers 2 Yr. Avg. (2012-2013) 11.9% 6.5% 10 Yr. Avg. 4.5% 2.9% Marketing Local Ad Spend 0.88% 0.3% National Ad Spend 3.25% 3.5% Investment/Sq. Ft. $420.3 $470.4 New Build Cost/Acquisition Cost 1.73 % of System at Current Image 75.0% 65.3% % of System Built in Last 7 Years 9.3% 24.0% Total Ad Spend ($ Millions) $187 $1,107 Total # Franchised Units 1,838 3,441 Total Ad Spend Market Share 16.9% % of System Franchised 98.8% 38.4% Menu, Marketing & Promotions Chain Total Franchisees 36 233 Avg. # Units/Franchisee 51.1 14.8 Menu Size 78 98 Initial Franchise Fee $35,000 $39,500 # New Products 2013 18 14 Royalty Fee 4.0% 4.1% # New Products YTD 2014 11 15 Minimum Net Worth Requirement N/a $3,250,000 Average check $13.50 $16.45 Daypart sales S&P Debt Rating 0 Breakfast N/a N/a Stock Performance LTM 25.5% 6.1% Lunch 38% 32% Dinner 62% 68% Late Night N/a N/a Above Average RR Dashboard Segment New Build Economics System Condition Franchise Summary Franchisor Condition Casual Below Average Chain Home Segment Avg./Total Source: RR Estimates Report Not Licensed for Distribution
Domestic System Statistics - 10 Year Summary FYE December 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Outlook 10 yr. Average System-wide sales ($'000) System-wide Sales $3,888,400 $4,192,200 $4,542,900 $4,505,000 $4,485,000 $4,390,000 $4,328,000 $4,440,000 $4,515,000 $4,530,000 % Growth 10.5% 7.8% 8.4% -0.8% -0.4% -2.1% -1.4% 2.6% 1.7% 0.3% 2.6% Segment Sales $20,453,300 $22,142,600 $24,128,647 $25,349,409 $25,968,539 $25,676,145 $25,609,000 $26,568,000 $27,670,825 $28,144,500 % Growth 10.3% 8.3% 9.0% 5.1% 2.4% -1.1% -0.3% 3.7% 4.2% 1.7% 4.3% Concept's Market Share 19.0% 18.9% 18.8% 17.8% 17.3% 17.1% 16.9% 16.7% 16.3% 16.1% Market Share Change 0.0% -0.1% -0.1% -1.1% -0.5% -0.2% -0.2% -0.2% -0.4% -0.2% -0.3% Same Store Sales Franchised 5.0% 2.6% -0.5% -2.0% -2.4% -4.4% 0.6% 2.0% 1.3% -0.3% N/a 0.2% Company 3.8% -0.9% -1.0% -2.0% -1.3% -4.8% -1.9% 1.8% 0.6% N/a N/a -0.6% Total System 4.8% 1.7% -0.6% -2.1% -2.2% -4.5% 0.3% 2.0% 1.2% -0.3% (2.0%) to 1.0% 0.0% Segment Avg. 2.6% 2.9% 0.5% -0.3% -2.6% -4.8% 0.0% 1.9% 1.7% -0.1% 0.2% Unit Counts Franchised 1,189 1,246 1,320 1,354 1,470 1,470 1,553 1,694 1,862 1,838 Company 424 486 521 510 405 398 309 177 23 23 Home Total 1,613 1,732 1,841 1,864 1,875 1,868 1,862 1,871 1,885 1,861 % Growth 4.9% 7.4% 6.3% 1.2% 0.6% -0.4% -0.3% 0.5% 0.7% -1.3% 2.0% Segment Avg. 7.1% 7.5% 7.4% 5.7% 3.6% 1.3% 1.0% 1.8% 1.4% 1.8% 3.9% Gross New Unit Development Franchised 66 78 89 43 28 18 14 15 20 20 35 Company 32 52 35 14 1 0 0 0 0 0 0 Total 98 130 124 57 29 18 14 15 20 20 35 % Growth 6.4% 8.1% 7.2% 3.1% 1.6% 1.0% 0.7% 0.8% 1.1% 1.1% 1.9% 3.1% Segment Avg. 8.1% 8.4% 8.4% 6.9% 4.9% 3.4% 2.5% 2.8% 2.7% 3.0% 2.4% 5.1% Transfers & Closure Rates Franchised Transfers 0.1% 0.4% 2.4% 6.1% 7.7% 1.0% 0.5% 3.5% 15.5% 8.3% 4.5% Segment Transfers 0.1% 0.7% 3.8% 3.2% 4.5% 0.6% 0.5% 2.4% 8.3% 4.7% 2.9% Franchised Closings 1.9% 0.8% 0.9% 0.8% 1.1% 1.7% 1.0% 0.4% 0.4% 2.4% 1.1% Company Closings 0.3% 0.2% 0.8% 4.6% 0.6% 0.0% 1.5% 0.0% 0.0% 0.0% 0.8% System Closings 1.5% 0.7% 0.9% 1.8% 1.0% 1.3% 1.1% 0.3% 0.3% 2.3% 1.1% Segment Closings 1.0% 0.9% 0.9% 1.2% 1.2% 2.1% 1.4% 1.0% 1.3% 1.2% 1.2% Source: RR Estimates Report Not Licensed for Distribution
Applebee s Qtr ended: 6/30/14 US Comps: +0.6% Company Sales: +1.5% Costs: N/A 2Q comps increased +0.6% and Applebee s outperformed the casual dining segment based on industry sales and traffic data. Early in 2Q, the messaging centered around lunch combos and 2 for $20 while in May the brand continued the lunch combos campaign and transitioned to fresh flavors of the Southwest (helping generate consumer interest in lunch and dinner day parts). Brand reported a deep dive into: menu architecture and design; grill and bar pipeline of new and improved menu items; value proposition; ad and media mix; and bar business relevancy (i.e. craft beer). One important goal is to determine how to better compete against fast casual. Resultant brand reset is built on 5 key strategies: 1) achieving operations excellence to improve inrestaurant speed and consistency; 2) achieving brand perception leadership; 3) define day part strategies that drive profitable and sustainable growth; 4) delivering a personalized experience to build guest loyalty; and 5) defining the of the future to adapt to the new marketplace. The brand has identified new consumer targets. It's less about age/generations/price and more about the increasingly important emotional connection (service platform/experience/food taste). Minimal pricing has kept pace with inflation and some franchisees are offering the 2 for $25 deal. Tablets roll-out will be completed by the end of the year.
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