• 2020 new build ROIs continued a declining trend, reflecting: higher construction costs; moderating new build AUV growth; and store-level margin pressure.
• A ramping build vs. buy ratio reflects the above trends in addition to declining acquisition multiples.
• This suggests that growth minded operators are more likely to buy than build for the time being.
+ News Worthy of Scrutiny from WHO & CDC
+ Unemployment by Age Groups
+ New Build Costs in Flux
+ Arby’s – RR Executive Summary
+ Denny’s – RR Executive Summary
+ Restaurant Stock Performance Says it All
+ CDC’s Comorbidity Data is Very Helpful
+ Assessing the Lockdown’s Impact
+ Executive Summary for BK & Jersey Mike’s
Opinion: In the end, the industry’s mission must be to find a way back to normal, not accepting a “new normal”; While 1H:20 franchisee EBITDA valuation multiples declined, it is +7.4% higher than the 12-year low set in 2009; The average 2019 EBITDAR margin for the $1B+ chains improved slightly to 18.8% (but remains near the 17 year low); Popeyes’ eye-popping success with its chicken sandwich…; Taco Bell must wait for an eventual return of the Millennials and late-night.
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The sit-down model is broken in the post-lockdown world, but all is not lost as this crisis has simply brought to light weaknesses in the dine-in foundation that were there all along. So it is time for operators to do what they do best – analyze, innovate & improve!
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