Burger King 2013 Annual Report Download - page 47

Table of Contents
Comparable Sales Growth
During 2013, system comparable sales growth in LAC was relatively flat. During 2012, system comparable sales growth of 5.7% in LAC was driven
by comparable sales growth in Brazil and Mexico, partially offset by negative system comparable sales growth in Puerto Rico.
Company restaurants
During 2013, Company restaurant revenues decreased primarily due to the net refranchising of Company restaurants during the past year. As of
April 1, 2013, we ceased to have any Company restaurants in LAC.
During 2013, CRM% decreased primarily as a result of the deleveraging effect of negative comparable sales on our fixed occupancy and other operating
costs.
During 2012, Company restaurant revenues decreased primarily due to unfavorable FX impact, partially offset by comparable sales growth.
During 2012, CRM% decreased primarily as a result of increased food, paper and product costs associated with price increases in certain commodities,
higher labor costs associated with wage rate increases, higher labor costs related to food delivery and kiosks and higher rent expense on certain lease renewals.
Franchise and Property
During 2013, franchise and property revenues increased due to an increase in royalties driven by net restaurant growth and the net refranchising of
Company restaurants during 2013 and property revenues due to new leases associated with six restaurants leased to our Mexico joint venture. These factors
were partially offset by unfavorable FX impact and a $2.4 million decrease in franchise fees and other revenue primarily due to the early renewal of franchise
agreements in 2012.
During 2013, franchise and property expenses increased primarily due to property expense associated with six properties leased to our Mexico joint
venture as a result of the net refranchising of Company restaurants during 2013.
During 2012, franchise and property revenues increased due to an increase in royalties driven by comparable sales growth and net restaurant growth.
Additionally, franchise and property revenues increased as a result of a $4.5 million increase in franchise fees and other revenue driven by the increase in the
number of restaurant openings and the early renewal of franchise agreements. These factors were partially offset by the prior year collection and recognition of
cumulative royalties previously deferred.
During 2012, franchise and property expenses increased primarily due to a $1.1 million decrease in bad debt recoveries compared to 2011.
Segment income
During 2013, segment income decreased due to a decrease in CRM, partially offset by an increase in franchise and property revenues net of expenses
and a decrease in Segment SG&A.
During 2012, segment income increased due to an increase in franchise and property revenues net of expenses and a decrease in Segment SG&A,
partially offset by a decrease in CRM.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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