In this FDD Talk post based on Item 19 of Papa John’s 2014 FDD, you will find the answers to the following questions:
- What were the 2013 average restaurant-level sales revenues of domestic franchised and company-owned Papa John’s restaurants for the company’s fiscal year ended December 29, 2013?
- What were the 2013 average food costs, labor costs and taxes, manager’s labor and taxes, mileage, advertising, controllables, rent and common area maintenance, other non-controllables, training costs, store bonuses, and pre-tax cash flows for company-owned Papa John’s restaurants only?
- How did the franchisor obtain the information used in Item 19? Was this information based on actual historical costs and results?
- What are some factors that may affect the comparability of the expense (or cash outflow) data, which is drawn solely from company-operated restaurants, to franchised restaurants and the data’s effectiveness as a guide or template for potential operating results of a franchised restaurant?
- How many domestic Papa John’s restaurants were open and operating at the close of Papa John’s 2013 fiscal year? How many of these were company-owned, including restaurants owned by franchisees in which Papa John’s has a majority interest?
- Were the results from non-traditional Papa John’s restaurants and restaurants that were open only part of the year included in Item 19? If not, then why not?
- What is the total number of franchised and company-owned Papa John’s restaurants included in the data?
- In the revenue figures, were non-recurring items, such as proceeds from the sale of used furniture or equipment, included?
- Does the cash flow data include depreciation expense or any other non-cash items?
- Do company-owned Papa John’s restaurants pay royalties?
Has Papa John’s been able to achieve certain economies of scale and operational efficiencies that may not be available to a franchisee operating one restaurant or a limited number of restaurants?
- Where are company-owned Papa John’s restaurants typically clustered around?
Do sales typically “ramp up” as the restaurant and market develop? Does greater penetration (i.e. the greater the number and concentration of restaurants) in a market also affect performance?