Tuesday, August 08, 2006

Special Analysis: What is the Average Unit Volume (AUV) of tomorrow’s leading companies?

Special Anaylsis from Restaurant Chains.net

We queried the www.restaurantchains.net database to see how many companies in our database universe have between 10 and 30 stores. We wanted to see what average unit volumes were the most popular amongst tomorrow’s winners. We discovered a total of 680 restaurant chain companies* that fell within the range.

Check out the following chart and accompanying graph displaying the popularity of AUV's of tomorrow’s leaders:

AUV (in $millions) Total # of units %
1-.5 74 10.8
.6-1 245 36
1.1-1.5 88 12.9
1.51-2 81 11.9
2.1-2.5 57 8.4
2.51-3 69 10.2
3.1-3.5 31 4.5
3.51-4 15 2.2
4.1-4.5 7 1
4.51-5 11 1.6
5.1-5.5 2 0.3

The largest group with nearly 50% of locations have less than $1 million AUV per year. 23% of companies have between $2-3 million AUV. Less than 10% have an AUV of more than $3 million.

Conclusion: Large restaurants with big check averages have faded in popularity. Today’s latest breed of operators are choosing to open restaurants that offer fast service, smaller locations and with a lower per person check average.

* For purposes of the study we divided the companies by $.5 million AUV ranges.