Chili's 2008 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2008 Chili's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

We periodically reevaluate restaurant sites to ensure that site selection attributes have not
deteriorated below our minimum standards. In the event site deterioration occurs, each brand makes a
concerted effort to improve the restaurant’s performance by providing physical, operating and marketing
enhancements unique to each restaurant’s situation. If efforts to restore the restaurant’s performance to
acceptable minimum standards are unsuccessful, the brand considers relocation to a proximate, more
desirable site, or evaluates closing the restaurant if the brand’s measurement criteria, such as return on
investment and area demographic trends, do not support relocation. Since inception, relating to our
restaurant brands, we have closed 170 restaurants, including 44 in fiscal 2008. We perform a
comprehensive analysis that examines restaurants not performing at a required rate of return. A portion of
these closed restaurants were performing below our standards or were near or at the expiration of their
lease term. Our strategic plan is targeted to support our long-term growth objectives, with a focus on
continued development of those restaurant brands that have the greatest return potential for the Company
and our shareholders.
The following table illustrates the system-wide restaurants opened in fiscal 2008 and the planned
openings in fiscal 2009:
Fiscal 2008 Fiscal 2009
Openings(1) Projected Openings
Chili’s:
Company-operated ........................ 59 9-11
Franchise(2) ............................. 33 30-40
On The Border:
Company-operated ........................ 7 1
Franchise(2) ............................. 4 9-12
Maggiano’s ................................ 1 2
Macaroni Grill:
Company-operated ........................ 3 —
Franchise(2) ............................. 6 4-6
International:
Company-operated(3) ...................... 1 2
Franchise(3) ............................. 31 31-36
Total ................................. 145 88-110
(1) The numbers in this column are the total of new restaurant openings and openings of
relocated restaurants during the fiscal year.
(2) The numbers on this line are projected domestic franchise openings.
(3) The numbers on this line are for all brands.
We anticipate that some of the fiscal 2009 projected restaurant openings may be constructed pursuant
to agreements where a landlord contributes some of the building construction costs. In other cases, we may
either lease or own the land (paying for any owned land from our own funds) and either lease or own the
building, furniture, fixtures and equipment (paying for any owned items from our own funds).
5