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Tuesday
Jun122018

Unit Economics

  • RR’s Industry Data Report on Unit Economics provides: (1) FYE 2017 unit level AUV along with COGS, labor, royalty, advertising, other operating and EBITDAR margin estimates for 46 chains; (2) a 5-year history of unit economic performance; (3) an analysis of food and labor cost drivers; and (4) aggregate G&A margins, rent margins and leverage ratios based on RR’s annual lender survey.
  • Report highlights: (1) Average 2017 EBITDAR margin for the $1B+ chains declined -60 bps due to higher labor costs; (2) higher rent expense based on our lender survey suggests 2017 EBITDA (post G&A) also contracted; (3) franchisee leverage levels increased, but coverage ratios remain solid with lenders reporting minimal delinquencies; and (4) 2018 EBITDAR margin pressure reflects expectations that moderate sales growth will be insufficient to keep pace with higher labor & commodity costs. 

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