FINANCE: Popeye's Talks Franchisee Profit
Popeye's (NYSE:AFCE) had a nice first quarter. Same store sales were up materially in both the U.S. and international markets. And it beat revenue and earnings per share targets. They are building both company stores and opening net new franchisee units, while AFCE is culling the field by closing lower performing units.
Popeye's beat KFC at the Chapter 11 game and successfully reflagged old KFC units to Popeyes units in two US markets last year.
In a first for restaurant franchisors, Popeye's discussed franchisee store level EBITDAR (EBITDA exluding rent) in its quarterly earnings call. The number was $40,000 improved from year to year, to 20.4% of sales. The U.S. domestic AUV base was about $1.2 million.
Other than scattered McDonalds and partial system Dunkin Donuts (DNKN) disclosure, no franchisor talks so specifically, in recent memory.
Even though rents have to be subtracted, and EBITDA has to cover debt service and CAPEX, thats a pretty good number. And great disclosure on the part of CEO Cheryl Bachelder and team.
See Restaurant Finance Monitor's article on this.