Panera Bread 2005 Annual Report Download - page 29

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23
ended December 25, 2004 compared to the fiscal year ended December 27, 2003, primarily as a result of the increase in the number of
Company-owned bakery-cafe openings. The increase in bakery-cafe sales was primarily due to the impact of a full year’s operations
of the 29 Company-owned bakery-cafes opened and 15 bakery-cafes acquired in 2003, the opening of 54 Company-owned bakery-
cafes in 2004, and the 2.9% increase in comparable bakery-cafe sales for the fiscal year ended December 25, 2004. Bakery-cafes
included in comparable sales increases and not included in comparable sales increases contributed 8% and 92%, respectively, of the
$96.2 million increase in sales from 2003. The average weekly sales per Company-owned bakery-cafe and the related number of
operating weeks for the fiscal year ended December 25, 2004 and December 27, 2003 were as follows:
For the Fiscal Year Ended
December 25,
2004
December 27,
2003
Percentage
Increase
Company-owned average weekly sales ................................................................................... $ 35,620 $ 35,198 1.2%
Company-owned number of operating weeks ......................................................................... 10,166 7,555 34.6%
Franchise royalties and fees rose 22.7% to $44.4 million for the fiscal year ended December 25, 2004 from $36.2 million for the
fiscal year ended December 27, 2003. The components of franchise royalties and fees were as follows (in thousands):
For the Fiscal Year Ended
December 25,
2004
December 27,
2003
Franchise royalties ....................................................................................................................................... $ 41,199 $ 32,903
Franchise fees .............................................................................................................................................. 3,250 3,342
Total ........................................................................................................................................................... $ 44,449 $ 36,245
The increase in royalty revenue can be attributed to the impact of a full year’s operations of the 102 franchise-operated bakery-
cafes opened in 2003, the opening of 89 franchise-operated bakery-cafes in 2004, and the 2.6% increase in comparable franchise-
operated bakery-cafe sales for the fiscal year ended December 25, 2004. Franchise-operated bakery-cafes included in comparable sales
increases and not included in comparable sales increases contributed 9% and 91%, respectively, of the $168.1 million increase in sales
from 2003. The average weekly sales per franchise-operated bakery-cafe and the related number of operating weeks for the fiscal year
ended December 25, 2004 and December 27, 2003 were as follows:
For the Fiscal Year Ended
December 25,
2004
December 27,
2003
Percentage
Increase
Franchisee average weekly sales ............................................................................................. $ 36,171 $ 35,777 1.1%
Franchisee number of operating weeks.................................................................................... 24,303 19,872 22.3%
As of December 25, 2004, there were 515 franchise-operated bakery-cafes open and commitments to open 406 additional
franchise-operated bakery-cafes. We expect these bakery-cafes to open according to the timetables established in the various ADAs
with franchisees, with the majority opening in the next four to five years. In 2005, we expect to open 80 to 90 new franchise-operated
bakery-cafes. The ADA requires a franchisee to develop a specified number of bakery-cafes on or before specific dates. If a franchisee
fails to develop bakery-cafes on schedule, we have the right to terminate the ADA and develop Company-owned locations or develop
locations through new area developers in that market. We may exercise one or more alternative remedies to address defaults by area
developers, including not only development defaults, but also defaults in complying with our operating and brand standards and other
covenants under the ADAs and franchise agreements.
Fresh dough facility sales to franchisees increased 18.0% to $72.6 million for the fiscal year ended December 25, 2004 from $61.5
million for the fiscal year ended December 27, 2003. The increase was primarily driven by the increased number of franchise-operated
bakery-cafes opened described previously partially offset by a decrease in average fresh dough sales per bakery-cafe to franchisees
due to a change in the mix of product sold by franchisees.