Papa Johns 2003 Annual Report Download - page 31

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The comparable sales base and average weekly sales for 2003 and 2002 for domestic Company-owned
and domestic franchised restaurants consisted of the following:
Company
Franchise
Company
Franchise
Total domestic units (end of year)
568
2,006
585
2,000
Equivalent units
577
1,990
581
1,982
Comparable sales base units
560
1,908
550
1,764
Comparable sales base percentage
97.1%
95.9%
94.8%
89.0%
Average weekly sales - comparable units
13,959
$
12,552
$
14,409
$
13,122
$
Average weekly sales - other units
10,956
$
10,706
$
11,100
$
10,238
$
Average weekly sales - all units
13,872
$
12,476
$
14,236
$
12,805
$
Year Ended
December 28, 2003
Year Ended
December 29, 2002
Domestic franchise and development fees, including approximately $430,000 recognized upon
development cancellation or franchise renewal and transfer, were $1.5 million in 2003 compared to $1.7
million in 2002. There were 56 domestic franchise unit openings in 2003 as compared to 76 in 2002.
Domestic commissary and other sales decreased 3.0% to $418.4 million for 2003 from $431.3 million in
2002, primarily as a result of lower commissary sales due to lower cheese costs, and lower equipment
sales in 2003 as a result of outsourcing this function in late 2002, partially offset by an increase in
revenues from insurance-related services provided to our franchisees.
International revenues consist of the Papa John’s United Kingdom operations which are denominated in
British Pounds Sterling and converted to U.S. dollars (92% of total 2003 international revenues) and
combined revenues from operations in 14 other international markets denominated in U.S. dollars.
International revenues decreased 1.2% to $31.6 million in 2003 compared to $32.0 million in 2002, as
lower Company-owned restaurant and commissary sales were substantially offset by a favorable
exchange rate impact of $2.4 million and increased royalties.
Costs and Expenses. The restaurant-operating margin at domestic Company-owned units was 16.9% for
2003 compared to 20.9% in 2002, consisting of the following differences as a percent of Company-
owned restaurant sales:
• Cost of sales was 0.7% lower in 2003 primarily due to lower cheese costs, partially offset by
portion increases for several core pizza products implemented during the second quarter of 2003.
• Salaries and benefits were 3.3% higher in 2003 reflecting the impact of an across-the-board
increase in base pay for general managers and assistant managers implemented during the third
quarter of 2002, the loss of leverage on fixed salaries due to the decrease in average unit sales
and increased health insurance costs. Additionally, in connection with the field management
realignment announced in January 2003, we increased restaurant staffing levels and general
manager and assistant manager bonus potential.
• Advertising and related costs were 0.9% higher in 2003 primarily due to increases in national
spending and lower than anticipated sales.
• Occupancy costs were 0.6% higher in 2003 primarily as a result of increased utility and general
insurance costs combined with lower sales.
• Other operating expenses were relatively consistent as a percentage of sales (0.1% lower in
2003).