Report Highlights

  • RR’s Industry Data Report on Unit Economics provides: (1) FYE 2019 unit level AUV along with COGS, labor, royalty, advertising, other operating and EBITDAR margin estimates for 49 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.

Conclusions

  • Report highlights: (1) Average 2019 EBITDAR margin for the $1B+ chains improved slightly to 18.8% (but remains near the 17 year low) due to slightly lower COGS and flat labor costs; (2) solid 2019 AUV growth (+2.2%) resulted in a higher average EBITDAR dollar amount for the 2nd year in a row (+2.5% to $386k); (3) franchisee leverage levels remain elevated and both G&A and rent expense increased but coverage ratios were solid with lenders reporting minimal delinquencies at the end of 2019; and (4) significant 1H:20 EBITDAR margin pressure reflects dramatic sales declines as a result of lock-downs & dining restrictions, somewhat off-set by government stimulus and franchisor relief programs.
  • A key consideration is determining how long it will take to return to 2019 sales & profit levels with QSR obviously recovering much faster than FSR. The silver lining is that FSR will likely retain its newfound off-premise sales which should be incremental to an eventual dine-in recovery.

Unit Economics 2020 – Outline