Burger King 2011 Annual Report Download - page 51

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Table of Contents
CRM % remained relatively flat as the impact of sales deleverage on our fixed labor and occupancy and other operating costs due to negative Company
comparable sales growth and the impact of acquisition accounting was offset by improved labor efficiencies in the U.K. and a decrease in start up expenses.
Franchise and Property
Franchise and property revenues increased due to franchise fees and royalties derived from franchise NRG, the net refranchising of Company restaurants
and a higher effective royalty rate driven by refranchisings in Germany and the Netherlands. These factors were partially offset by the impact of negative
franchise comparable sales growth on royalties and contingent rents, unfavorable FX impact and decreased rent income from a reduction in the number of
properties leased to franchisees.
Franchise and property expenses increased due to an increase in bad debt expense and franchise agreement amortization of $1.7 million. These factors
were partially offset by favorable FX impact and decreased rent expense from a reduction in the number of properties leased to franchisees.
Segment income and segment margin
Segment income and margin increased primarily due to a decrease in Management G&A and an increase in net franchise and property income.
Fiscal 2010 compared to Fiscal 2009
Company restaurants
Company restaurant revenues decreased due to the impact of negative Company comparable sales growth primarily, driven by negative Company
comparable sales growth in Germany, and the net refranchising of Company restaurants. These factors were partially offset by Company comparable sales
growth in Spain and the U.K. and favorable FX impact.
CRM % decreased primarily due to the unfavorable impact of sales deleverage on our fixed labor and occupancy costs as a result of negative Company
comparable sales growth and an increase in repair and maintenance costs, primarily in Germany in connection with our refranchising initiative.
Franchise and Property
Franchise and property revenues increased due to franchise comparable sales growth, driven by Turkey, Spain, and Italy, franchise NRG and favorable FX
impact. These factors were partially offset by a decrease in initial franchise fees due to lower franchise NRG compared to the prior year and the net effect of
changes to our property portfolio. Franchise and property expenses decreased due to the net effect of changes to our property portfolio.
Segment income and segment margin
Segment income and margin increased due to a net increase in franchise and property income and decrease in Management G&A expenses partially offset
by a decrease in CRM.
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Source: Burger King Holdings Inc, 10-K, March 14, 2012 Powered by Morningstar® Document Research℠