Chili's 2012 Annual Report Download - page 13

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The following table illustrates the system-wide restaurants opened in fiscal 2012 and the planned openings
in fiscal 2013:
Fiscal 2012
Openings(1)
Fiscal 2013
Projected Openings
Chili’s:
Company-owned .................... — —
Franchise(2) ........................ 6 5
Maggiano’s ............................. — —
International:
Company-owned(3) .................. — —
Franchise(3) ........................ 29 30-35
Total .......................... 35 35-40
(1) The numbers in this column are the total of new restaurant openings and
openings of relocated restaurants during fiscal 2012.
(2) The numbers on this line for fiscal 2013 are projected domestic franchise
openings.
(3) The numbers on this line are for Chili’s.
We periodically reevaluate company-owned restaurant sites to ensure that site 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. We closed five company-owned restaurants in fiscal 2012. We perform a
comprehensive analysis that examines restaurants not performing at a required rate of return. These closed
restaurants were generally 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.
Franchise Development
In addition to our development of company-owned restaurants, our restaurant brands will continue to
expand through our franchisees and joint venture partners.
As part of our strategy to expand through our franchisees, our franchise operations (domestically and
internationally) increased in fiscal 2012. The following table illustrates the percentages of franchise operations
(versus total restaurants) as of June 27, 2012 for the Company and by restaurant brand, respectively:
Percentage of Franchise
Operated Restaurants
Domestic International
Brinker ................................ 29% 16%
Chili’s ............................. 30% 17%
Maggiano’s ......................... — 2%
Domestic
Domestic expansion is focused primarily through growth in our number of franchised restaurants. We are
accomplishing this part of our growth through existing, new or renewed development obligations with new or
existing franchisees. In addition, we have from time to time also sold and may sell company-owned restaurants to
5