Papa Johns 2010 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2010 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

49
share in 2008 (including a $0.24 loss from the consolidation of BIBP, a $0.06 gain from the finalization
of certain income tax issues and a $0.20 loss from restaurant impairment and disposition losses).
Review of Operating Results
Revenues.
Domestic Company-owned restaurant sales were $503.8 million for 2009 compared to $533.3
million for 2008. The 5.5% decrease was primarily due to the sale of 62 Company-owned restaurants to
franchisees during the fourth quarter of 2008.
Domestic franchise sales increased 3.5% to $1.55 billion in 2009, from $1.50 billion in 2008, primarily
resulting from an increase of 3.3% in equivalent units. The increase in equivalent units is due to the
franchise entities’ purchase of 62 restaurants from the Company during the fourth quarter of 2008.
Domestic franchise royalties increased 2.2% to $61.0 million in 2009 from $59.7 million for the
comparable period in 2008 primarily due to the increase in the royalty rate from 4.25% to 4.50% for the
last four months of 2009 and an increase in equivalent units.
The comparable sales base and average weekly sales for 2009 and 2008 for domestic Company-owned
and domestic franchised restaurants consisted of the following:
Company-
owned Franchised
Company-
owned Franchised
Total domestic units (end of period) 588 2,193 592 2,200
Equivalent units 585 2,140 637 2,072
Comparable sales base units 569 2,026 612 1,930
Comparable sales base percentage 97.3% 94.7% 96.1% 93.1%
Average weekly sales - comparable units 16,628$ 13,948$ 16,276$ 13,978$
Average weekly sales - traditional non-comparable units 15,823$ 11,477$ 12,552$ 10,798$
Average weekly sales - non-traditional non-comparable units 7,577$ 20,840$ 7,577$ 26,621$
Average weekly sales - total non-comparable units 13,902$ 14,234$ 11,737$ 13,276$
Average weekly sales - all units 16,551$ 13,963$ 16,098$ 13,930$
Year Ended Year Ended
December 27, 2009 December 28, 2008
Domestic franchise and development fees were $519,000 in 2009, or a decrease of $1.1 million, from
fees of $1.6 million in 2008, consisting of the following (in thousands, except unit data):
2009 2008
Increase
(Decrease)
Total units opened 79 98 (19)
Units opening with no fees 63 57 6
Unit opening fees 273$ 780$ (507)$
Franchise renewal fees 15 445 (430)
Cancellation, transfer and extension fees 231 375 (144)
Total franchise and development fees
519
$
1,600
$
(1,081)
$
Domestic commissary sales decreased $14.0 million, or 3.2%, to $417.7 million for 2009, from $431.7
million in 2008, due to decreases in the prices of certain commodities, primarily cheese and wheat. Our
commissaries charge a fixed-dollar markup on the cost of cheese, and cheese cost is based upon an