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35
Results of Operations
2015 Compared to 2014
Discussion of Revenues. Consolidated revenues increased $39.2 million, or 2.5%, to $1.64 billion in
2015, compared to $1.60 billion in 2014. Revenues are summarized in the following table on a reporting
segment basis.
Increase Increase
Dec. 27, Dec. 28, (Decrease) (Decrease)
(In thousands) 2015 2014 $ %
North America Revenues:
Domestic Company-owned restaurant sales 756,307$ 701,854$ 54,453$ 7.8%
Franchise royalties 95,046 89,443 5,603 6.3%
Franchise and development fees 1,010 726 284 39.1%
Domestic commissary sales 615,610 629,492 (13,882) -2.2%
Other sales 64,711 74,179 (9,468) -12.8%
International Revenues:
Royalties and franchise and development fees 27,289 25,730 1,559 6.1%
Restaurant and commissary sales 77,402 76,725 677 0.9%
Total Revenues 1,637,375$ 1,598,149$ 39,226$ 2.5%
Year Ended
The increase in revenues in 2015 compared to 2014 was primarily due to the following:
• Domestic Company-owned restaurant sales increased $54.5 million, or 7.8% primarily due to an
increase of 5.9% in comparable sales and a 2.7% increase in equivalent units. “Equivalent units”
represents the number of restaurants open at the beginning of a given period, adjusted for
restaurants opened, closed, acquired or sold during the period on a weighted average basis.
• North America franchise royalty revenue increased approximately $5.6 million, or 6.3%,
primarily due to a 3.6% increase in comparable sales, an increase of 1.0% in equivalent units and
lower royalty incentives.
• Domestic commissary sales decreased $13.9 million, or 2.2%, as lower revenues associated with
lower cheese prices were somewhat offset by increases in restaurant sales volume. Pricing for
cheese is based on a fixed dollar markup; when cheese prices decrease, revenues decrease with no
overall impact on the related dollar margin.
• Other sales decreased approximately $9.5 million, or 12.8%, primarily due to lower FOCUS
equipment sales in 2015, as anticipated. The higher levels of FOCUS equipment sales in 2014
had no significant impact on operating results. See the FOCUS System section above for
additional information.
• International royalties and franchise and development fees increased approximately $1.6 million,
or 6.1%, primarily due to higher royalties from an increase in the number of franchised
restaurants and a 7.3% increase in franchised comparable sales, calculated on a constant dollar
basis. The negative impact of foreign currency exchange rates reduced our revenues by
approximately $2.7 million in 2015.
• International restaurant and commissary sales increased approximately $700,000, or 0.9%,
primarily due to an increase in commissary and other revenues, particularly in the United
Kingdom, with increases in units and higher comparable sales. This increase was somewhat offset
by lower sales at China Company-owned restaurants due to the disposition of eleven restaurants
in 2014 and negative comparable sales. Additionally, sales were negatively impacted $4.8 million
by foreign currency exchange rates.