Papa Johns 2008 Annual Report Download - page 58

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Domestic system-wide franchise sales decreased 3.0% to $1.46 billion in 2007, from $1.51 billion for the
comparable period in 2006, primarily resulting from a 1.6% decrease in equivalent units during 2007
from the purchase of restaurants by the Company and the impact of the 53rd week of operations in 2006.
Domestic franchise royalties decreased 1.9% to $55.3 million in 2007 from $56.4 million for the
comparable period in 2006 primarily due to a decrease in franchise sales resulting from the decrease in
equivalent units and the impact of the 53rd week of operations in 2006. Comparable sales increased 0.3%
and 2.9% in 2007 and 2006, respectively.
The comparable sales base and average weekly sales for 2007 and 2006 for domestic Company-owned
and domestic franchised restaurants consisted of the following:
Company-
owned Franchised
Company-
owned Franchised
Total domestic units (end of period) 648 2,112 577 2,080
Equivalent units 616 2,035 529 2,068
Comparable sales base units 586 1,918 514 1,951
Comparable sales base percentage 95.1% 94.3% 97.2% 94.3%
Average weekly sales - comparable units 16,016$ 13,852$ 16,129$ 13,826$
Average weekly sales - traditional non-comparable units 10,625$ 11,239$ 12,552$ 10,751$
Average weekly sales - non-traditional non-comparable units 8,272$ 25,757$ 6,984$ 25,883$
Average weekly sales - total non-comparable units 10,292$ 13,652$ 10,918$ 13,074$
Average weekly sales - all units 15,739$ 13,841$ 15,981$ 13,783$
December 30, 2007 December 31, 2006
Year Ended Year Ended
Domestic franchise and development fees were $4.8 million in 2007, an increase of $2.2 million, from
fees of $2.6 million in 2006, including the collection of $2.0 million of fees associated with the franchise
renewal program in 2007, which was substantially completed during the fourth quarter of 2007. We
recognized approximately $700,000 for development cancellations and transfer payments in 2007,
compared to $900,000 in the corresponding period of the prior year. There were 140 domestic franchised
unit openings in 2007 compared to 105 in 2006. The domestic openings in 2007 included non-traditional
units in 23 Live Nation amphitheaters compared to the opening of non-traditional units in 17 Six Flags
theme parks in 2006. The Live Nation amphitheaters and Six Flags theme parks did not generate opening
fees under the terms of our multi-year marketing and partnership agreement.
Domestic commissary sales decreased $14.0 million, or 3.4%, to $399.1 million for 2007, from $413.1
million for the comparable period in 2006, primarily due to the impact of the 53rd week of operations in
2006 and the impact of fewer equivalent franchised units due to the Company’s acquisition of 118
restaurants from franchisees during 2006 and 2007 (sales to Company-owned units are eliminated in
consolidation). The average equivalent block price per pound of cheese as sold from BIBP to PJ Food
Service was $1.45 in 2007 as compared to $1.50 in 2006. Other sales, which include our online and print
and promotions businesses, as well as our insurance agency operations, were $61.8 million and $50.5
million for the 2007 and 2006 periods, respectively. Other sales increased due to expanded commercial
volumes at our print and promotions operations and increased online sales.
International revenues, which exclude the Perfect Pizza operations that were sold in March 2006, consist
primarily of the PJUK continuing operations, denominated in British pounds sterling and converted to
U.S. dollars (approximately 64% and 66% of total 2007 and 2006 international revenues, respectively).
International revenues increased 34.3% to $31.2 million in 2007, from $23.2 million in 2006, as a result
of the acquisition of restaurants in Beijing, China in December 2006, increased royalty revenues from
additional franchised units and increased commissary sales at our PJUK subsidiary.