Panera Bread 2012 Annual Report Download - page 34

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26
The increase in net bakery-cafe sales in fiscal 2011 compared to the prior fiscal year was primarily due to the opening of 53 new
Company-owned bakery-cafes, the acquisition of 30 franchise-operated bakery-cafes, and the 4.9 percent increase in comparable
Company-owned net bakery-cafe sales in fiscal 2011, partially offset by the closure of three Company-owned bakery-cafes and
the sale of two Company-owned bakery-cafes.
The increase in average weekly net sales for Company-owned bakery-cafes in fiscal 2012 compared to the prior fiscal year was
primarily due to the above noted average check growth that resulted from retail price increases and our category management
initiatives.
The increase in average weekly net sales for Company-owned bakery-cafes in fiscal 2011 compared to the prior fiscal year was
primarily due to the above noted average check growth that resulted from retail price increases and our category management
initiatives.
Franchise royalties and fees
The following table summarizes franchise royalties and fees for the periods indicated (dollars in thousands):
For the fiscal year ended
December 25,
2012 December 27,
2011 December 28,
2010 % Change
in 2012 % Change
in 2011
Franchise royalties . . . . . . . . . . . . . . . . . . . . . $ 100,159 $ 90,486 $ 84,806 10.7 % 6.7 %
Franchise fees . . . . . . . . . . . . . . . . . . . . . . . . . 1,917 2,307 1,389 (16.9)% 66.1 %
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 102,076 $ 92,793 $ 86,195 10.0 % 7.7 %
Franchise-operated average weekly net sales .$ 46,526 $ 44,527 $ 43,578 4.5 % 2.2 %
Franchise-operated number of operating
weeks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,593 41,058 41,354 3.7 % (0.7)%
The increase in franchise royalty and fee revenues in fiscal 2012 compared to the prior fiscal year was primarily due to the opening
of 64 new franchise-operated bakery-cafes and the 5.0 percent increase in comparable franchise-operated net bakery-cafe sales in
fiscal 2012, partially offset by our acquisition of 16 franchise-operated bakery-cafes and the closure of six franchise-operated
bakery-cafes.
The increase in franchise royalty and fee revenues in fiscal 2011 compared to the prior fiscal year was primarily due to the opening
of 59 new franchise-operated bakery-cafes and the 3.4 percent increase in comparable franchise-operated net bakery-cafe sales in
fiscal 2011, partially offset by our acquisition of 30 franchise-operated bakery-cafes and the closure of 21 franchise-operated
bakery-cafes.
As of December 25, 2012, there were 843 franchise-operated bakery-cafes open and we have received commitments to open 159
additional franchise-operated bakery-cafes. The timetables for opening these bakery-cafes are established in the respective Area
Development Agreements, referred to as ADAs, with franchisees, which provide for the majority of these bakery-cafes to open
in the next four to five years. An ADA requires a franchisee to develop a specified number of bakery-cafes by specified dates. If
a franchisee fails to develop bakery-cafes on the schedule set forth in the ADA, we have the right to terminate the ADA and develop
Company-owned locations or develop locations through new franchisees in that market. We may exercise one or more alternative
remedies to address defaults by franchisees, including not only development defaults, but also defaults in complying with our
operating and brand standards and other covenants included in the ADAs and franchise agreements. We may waive compliance
with certain requirements under its ADAs and franchise agreements if we determine that such action is warranted under the
particular circumstances.