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2011 Gross New Unit Development Slowest in 5 Years
- RR's 2012 Chain Unit Development and Closure analysis is based on 46 national restaurant brands which operated more than 138,000 units as of FYE 2011. Data points also include a 5 year history and franchise transfer activity.
- 2011 gross new unit development came in at its slowest pace in at least 5 years which we believe reflects a difficult operating environment as rising commodity costs more than off-set the benefit of a 3.0% increase in same store sales (driving down average EBITDAR margins to their lowest level in at least 9 years) as well as prospects for significantly higher labor costs due to healthcare mandates. Also, many systems continue to divert capital into remodel programs as opposed to new builds.
- While 2012 new unit development is expected to remain subdued, we note that actual new unit development has been outpacing initial projections for the last 4 years at an increasing rate.
- Closure rates continue to decline and would have been at a 5 year low excluding the impact of Quizno's and Starbucks.
Restaurant Research's Unit Development & Closures Report provides clients with data on new unit openings, transfers and closures by chain and segment for the most recent FYE as well as a 5 year average. Includes development projections for the next FYE by chain and segment. This report is useful for benchmarking net development by concept system.
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Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research® LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research's analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment. Copyright 2012.