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Friday
Jun292018

Unit & Sales Growth

Report Highlights
  • 10-year history for 56 $1B+ chains including: (1) total units; (2) company vs. franchisee ownership; (3) new units; (4) closures; (5) franchise transfers; (6) average units per franchisee by concept; (7) systemwide sales; and (8) system sales market share.
Conclusions
  • 2017 aggregate systemwide sales growth slowed and was below the 10-year historical average due to weak net unit growth and only a modest same store sales increase.
  • Consistently low aggregate annual gross unit development rate (+3.7% average from 2008 – 2017) for the $1B+ chains remains well below pre-recession levels (+5.6% average from 2003 – 2007).
  • Actual 2017 new unit development fell short of initial year projections for the first time since 2007.
  • Coffee/bakery and fast casual unit development continue to lead the industry.
  • Closure rates spiked to the highest level since 2009 which reflects that the 2017 store-level EBITDAR average for the $1B+ chains was at the lowest level since 2008.
  • 2017 closures were notably pressured by sub-sandwich (4.4%) and casual segment (3.1%) weakness.
  • The 2017 franchise transfer rate exceeded the development rate for the 6th year in a row, which reflects: a continued move towards franchisee consolidation (in search of scale based cost efficiencies); high construction costs; and the difficulty in securing acceptable sights. 

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