Kudos once again go to Popeye's Louisiana Kitchen Inc. (PLKI) not only for a good Quarter One 2014 earnings results reported just last evening, but also for continuing the practice of being the only publicly traded restaurant franchisor that I'm aware of that reports its franchisees cash flow proxy number.

Popeye's reports franchisee EBITDAR--earnings before interest, taxes, depreciation and rent. 

It's only a semi useful metric, as it misses rent and related expense, but also debt service and capital expenditures (CAPEX). Depreciation expense is an inperfect proxy for CAPEX.

In the first quarter of 2014, Popeyes franchisee community had an EBITDAR of 21.3%, compared to a 20.1% for the prior year. Franchisee same store sales were up 4.3%. Many more costs and expenses need to be subtracted to arrive at franchisee real economic gain, but at least it is some number.

Popeye's EBITDAR number is about 3.7% percentage points better than the GE Capital QSR survey sample published earlier this spring. Of course, you have to look at both dollars and percentages, per store to analyze fully.

Other franchisors do not want to talk about franchisee numbers. They don't have them, or the numbers are not good. Sometimes, franchisors are afraid and don't want to know them. But in any case, they should have them or should care.

Compare the Popeye's treatment to that of an article published by The Street's Laurie Kulikowski last week timed for Small  Business Week. 

Titled "Looking for an Investment-- Here are Eight of the  Best Franchises". The Street collaborated with a franchise survey group that surveys franchisee satisfaction. 

Not a single point of "return on investment" data or quantification was listed, despite that the survey had a "financial return satisfaction metric".

Satisfaction is nice, but what about making money? Not a useful article.

Sloppy staff work perhaps. But the franchisor should have the numbers. You manage what you measure.

Or, as my first boss in QSR operations drilled: "It's not what you expect, it's what you inspect."

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