Papa Johns 2008 Annual Report Download - page 50

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43
Review of Operating Results
Revenues. Domestic Company-owned restaurant sales were $533.3 million for 2008 compared to $504.3
million for 2007. The 5.7% increase was primarily due to increases of 1.7% and 3.4% in comparable
sales and equivalent units, respectively. The increase in equivalent units was due to the acquisition of
restaurants from franchisees during the third quarter of 2007, partially offset by the divestiture of
restaurants to franchisees during the fourth quarter of 2008.
Variable interest entities restaurant sales include restaurant sales for franchise entities to which we have
extended loans that qualify as VIEs. Revenues from these restaurants totaled $8.3 million in 2008 as
compared to $7.1 million in 2007.
Domestic system-wide franchise sales increased 2.7% to $1.50 billion in 2008, from $1.46 billion for the
comparable period in 2007, primarily resulting from increases of 0.6% and 1.8% in comparable sales and
equivalent units, respectively. Domestic franchise royalties increased 8.0% to $59.7 million in 2008 from
$55.3 million for the comparable period in 2007 primarily due to the increase in the royalty rate from
4.0% to 4.25% for the majority of domestic restaurants effective at the beginning of 2008.
Average weekly sales for comparable units include restaurants that were open throughout the periods
presented below. The comparable sales base for Company-owned and franchised restaurants,
respectively, includes restaurants acquired by the Company or divested to franchisees, as the case may
be, during the previous twelve months. Average weekly sales for other units include restaurants that were
not open throughout the periods presented below and include non-traditional sites such as Six Flags
theme parks and Live Nation concert amphitheaters. The comparable sales base and average weekly sales
for 2008 and 2007 for domestic Company-owned and domestic franchised restaurants consisted of the
following:
Company-
owned Franchised
Company-
owned Franchised
Total domestic units (end of period) 592 2,200 648 2,112
Equivalent units 637 2,072 616 2,035
Comparable sales base units 612 1,930 586 1,918
Comparable sales base percentage 96.1% 93.1% 95.1% 94.3%
Average weekly sales - comparable units 16,276$ 13,978$ 16,016$ 13,852$
Average weekly sales - traditional non-comparable units 12,552$ 10,798$ 10,625$ 11,239$
Average weekly sales - non-traditional non-comparable units 7,577$ 26,621$ 8,272$ 25,757$
Average weekly sales - total non-comparable units 11,737$ 13,276$ 10,292$ 13,652$
Average weekly sales - all units 16,098$ 13,930$ 15,739$ 13,841$
December 28, 2008 December 30, 2007
Year Ended Year Ended