Chili's 2008 Annual Report Download - page 18

Our capital investment in new restaurants may differ in the future due to building design
specifications, site location, and site characteristics. The following table illustrates the approximate average
capital investment for restaurants opened in fiscal 2008:
Chili’s On the Border Maggiano’s Macaroni Grill
Land(1) ................ $1,003,000 $1,099,000 $2,312,000 $1,308,000
Building ................ 1,737,000 1,105,000 5,474,000 1,787,000
Furniture & Equipment ..... 497,000 495,000 1,386,000 507,000
Other(2) ................ 43,000 29,000 32,000 17,000
Total ................. $3,280,000 $2,728,000 $9,204,000 $3,619,000
(1) This amount represents the average cost for land acquisition, capital lease values net of
landlord contributions (or an equivalent amount for operating lease costs also net of
landlord contributions) based on estimated lease payments and other costs that will be
incurred through the term of the lease.
(2) This amount includes liquor licensing costs which can vary significantly depending on the
jurisdiction where the restaurants are located.
The specific rate at which we are able to open new restaurants is determined, in part, by our success in
locating satisfactory sites that meet or exceed our internal hurdle rates for return, negotiating acceptable
lease or purchase terms, securing appropriate local governmental permits and approvals, and by our
capacity to supervise construction and recruit and train management and hourly personnel.
Restaurant Management
Our philosophy to maintain and operate each brand as a distinct and separate entity ensures that the
culture, recruitment and training programs and unique operating environments of each brand are
preserved. These factors are critical to the viability of each brand. During fiscal 2008, we also incorporated
our focus on hospitality into each brand’s culture and training programs for both new and existing team
members.
Each brand is directed by a president and one or more vice presidents overseeing specifically
identified areas. At the same time we utilize common and shared infrastructure where it provides
efficiencies and cost-savings to the brands, including, among other services, accounting, information
technology, purchasing, restaurant development and legal.
Restaurant management structure varies by brand. The individual restaurants themselves are led by a
management team including a general manager and, on average, between two to six additional managers.
The level of restaurant supervision depends upon the operating complexity and sales volume of each brand
and each location. On average, depending on the brand needs, an area director/supervisor is responsible
for the supervision of three to eight restaurants. For those brands with a significant number of units within
a geographical region, additional levels of management may be provided.
We believe that there is a high correlation between the quality of restaurant management and the
long-term success of a brand. In that regard, we encourage increased experience at all management
positions through various short and long-term incentive programs, which may include equity ownership.
These programs, coupled with a general management philosophy emphasizing quality of life, have enabled
us to attract and retain team members.
We ensure consistent quality standards in all brands through the issuance of operations manuals
covering all elements of operations and food and beverage manuals, which provide guidance for
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