Buffalo Wild Wings 2008 Annual Report Download - page 24

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The number of company-owned and franchised restaurants open are as follows:
As of
Dec. 28,
2008
Dec. 30,
2007
Dec. 31,
2006
Company-owned restaurants 197 161 139
Franchised restaurants 363 332 290
The restaurant sales for company-owned and franchised restaurants are as follows (in thousands of dollars):
Fiscal Years Ended
Dec. 28,
2008
Dec. 30,
2007
Dec. 31,
2006
Company-owned restaurant sales $ 379,686 $ 292,824 $ 247,150
Franchised restaurant sales 849,753 724,486 621,897
Increases in comparable same-store sales are as follows (based on restaurants operating at least fifteen months):
Fiscal Years Ended
Dec. 28,
2008
Dec. 30,
2007
Dec. 31,
2006
Company-owned same-store sales 5.9% 6.9% 10.4%
Franchised same-store sales 2.8 3.9 6.1
The annual average price paid per pound for fresh chicken wings for company-owned restaurants is as follows:
Fiscal Years Ended
Dec. 28,
2008
Dec. 30,
2007
Dec. 31,
2006
Annual average price per pound $ 1.22 $ 1.28 $ 1.17
Fiscal Year 2008 Compared to Fiscal Year 2007
Restaurant sales increased by $86.9 million, or 29.7%, to $379.7 million in 2008 from $292.8 million in 2007. The
increase in restaurant sales was due to a $70.6 million increase associated with the opening of 40 new company-owned
restaurants in 2008, which includes eight stores acquired from Avado Brands, Inc. and nine stores acquired from our
franchisee in Nevada, and the 34 company-owned restaurants opened before 2008 that did not meet the criteria for same-store
sales for all, or part, of the year. A 5.9% increase in same-store sales accounted for $16.3 million of the increase in restaurant
sales.
Franchise royalties and fees increased by $5.9 million, or 16.0%, to $42.7 million in 2008 from $36.8 million in 2007.
The increase was due primarily to additional royalties collected from the 46 new franchised restaurants that opened in 2008
and a full year of operations for the 46 franchised restaurants that opened in 2007. Same-store sales for franchised restaurants
increased 2.8%.
Cost of sales increased by $23.2 million, or 25.8%, to $113.3 million in 2008 from $90.1 million in 2007 due primarily
to more restaurants being operated in 2008. Cost of sales as a percentage of restaurant sales decreased to 29.8% in 2008 from
30.8% in 2007. The decrease in cost of sales as a percentage of restaurant sales was primarily due to the leverage of food and
alcohol costs as a result of menu price increases and lower fresh chicken wing prices. Fresh chicken wing costs dropped to
$1.22 per pound in 2008 from $1.28 per pound in 2007. Also, boneless wings sales have increased as a part of our menu mix,
providing better margins and a corresponding lower cost of sales percentage.
Labor expenses increased by $26.8 million, or 30.6%, to $114.6 million in 2008 from $87.8 million in 2007 due
primarily to more restaurants being operated in 2008. Labor expenses as a percentage of restaurant sales increased to 30.2%
in 2008 compared to 30.0% in 2007. Labor costs in our restaurants were higher than prior year due to restaurants having
higher management salaries which were partially offset by lower workers’ compensation costs.
Operating expenses increased by $12.2 million, or 25.5%, to $60.2 million in 2008 from $48.0 million in 2007 due
primarily to more restaurants being operated in 2008. Operating expenses as a percentage of restaurant sales decreased to
15.9% in 2008 from 16.4% in 2007. The decrease in operating expenses as a percentage of restaurant sales was primarily due
to lower repair and maintenance costs and general liability insurance costs offset by higher natural gas hedging cost for future
months.