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Restaurant Chain New Build Cost & Franchisee Fee Trends

New Build Cost & Franchisee Fees Trends

Restaurant Research's 11th annual New Build Costs analysis provides average building cost estimates (excluding land) broken down by building & site work, equipment & signs, small wares & inventory, soft costs and initial franchise fees for 42 national chains. Data sources include a combination of franchisee survey responses, franchise disclosure documents and public company reports.

  • The 2012 average sales to investment ratio was basically flat with 2011 as a 2.1% increase in average new store sales volume was mostly off-set by a 1.7% increase in new build costs. Notably, the pizza segment continues to benefit from positive sales trends and a less expensive Delco Lite building at Pizza Hut while the sandwich segment improved because of more efficient new build economics at Quizno's.
  • Franchisors continue to offer incentives such as reduced initial and royalty fees to improve new build economics.

Source: RR

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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.