Jack In The Box 2015 Annual Report Download - page 29

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As a percentage of company restaurant sales, occupancy and other costs decreased to 23.7% of company restaurant sales in 2015, from 24.6% in 2014 and
24.9% in 2013. In 2015, the decrease was primarily due to sales leverage, partially offset by higher costs for credit card fees, property rent, and start up costs
associated with a new catering call center. In 2014, the decrease was due to sales leverage which more than offset higher maintenance and repair expenses and
costs for utilities, as well as an increase in equipment rental costs related to upgraded beverage equipment.
Qdoba Franchise Operations
The following table presents Qdoba franchise revenues, costs, and margin in each fiscal year and other information we believe is useful in analyzing the
change in franchise operating results (dollars in thousands):



Franchise rental revenues
$ 208
$ 238
$ 55
Royalties
$ 19,033
$ 16,448
$ 14,808
Franchise fees and other
1,562
1,750
2,441
Franchise royalties and other
$ 20,595
$ 18,198
$ 17,249
Total franchise revenues
$ 20,803
$ 18,436
$ 17,304
Rental expense (1)
$ 192
$ 215
$ 16
Franchise support and other costs
3,962
3,800
2,928
Total franchise costs
$ 4,154
$ 4,015
$ 2,944
Franchise margin
$ 16,649
$ 14,421
$ 14,360
Franchise margin as a % of franchise revenue
80.0%
78.2%
83.0%
Average number of franchise restaurants
333
322
311
% increase
3.4%
3.5%
Franchise restaurant AUVs
$ 1,140
$ 1,028
$ 961
Increase in franchise-operated same-store sales
10.4%
6.3%
Royalties as a percentage of franchise restaurant sales
5.0%
5.0%
4.9%
____________________________
(1) Included in franchise occupancy expenses in the accompanying consolidated statements of earnings.
Franchise royalties and other increased $2.4 million or 13.2% in 2015 and $0.9 million or 5.5% in 2014 as compared with the respective prior year.
Increases in both years primarily relate to higher AUVs resulting in an increase in revenues from royalties, and to a lesser extent, an increase in the average
number of Qdoba franchise restaurants. In 2014, these increases were partially offset by a reduction in franchise fees of $0.7 million.
Franchise support and other costs increased $0.2 million in 2015 and $0.9 million in 2014 in comparison with the respective prior year.

The following table presents the change in SG&A expenses in each fiscal year compared with the prior year (in thousands):



Pension and postretirement benefits
$ 4,989
$ (17,386)
Cash surrender value of COLI policies, net
3,833
1,365
Incentive compensation (including share-based compensation)
3,851
1,181
Pre-opening costs
1,648
(777)
Insurance
(1,163)
545
Advertising
(982)
(2,298)
Employee relocation
(463)
1,152
Other
2,644
2,365
$ 14,357
$ (13,853)
27