Thursday June 13, 2019, 00:00:00
By Mark Kalinowski
Not too long ago, the Dunkin’ concept owned and franchised by Dunkin’ Brands Group (DNKN; Neutral) filed its 700+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, we note that the average cost of goods sold for a Dunkin’ unit in the continental U.S. for the 12 months ended October 31, 2018 was 26.9% of sales (please keep in mind that all Dunkin’ units are franchised). The average labor cost was 27.8% of sales. These figures were up year-over-year by ten basis points and 20 basis points, respectively. Also, the average freestanding Dunkin’ unit in the continental U.S. generated average sales of $1,299,700 (for the 12-month period ending October 27, 2018) for units with a drive-thru, and average sales of $1,032,159 (for the same time period) for units lacking a drive-thru. The year-ago averages from the 2018 FDD were $1,299,922 and $1,041,001, respectively. We maintain our Neutral rating on DNKN and note the following:
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Thursday May 16, 2019, 00:00:00
By Mark Kalinowski
With this report, we increase our data-driven Kalinowski Quick-Service Other Index for Q2E by +30 basis points, to +2.6%. This figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during April 2019 and the beginning of May 2019.
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Friday May 10, 2019, 00:00:00
By Mark Kalinowski
African Swine Fever (ASF) is spreading rapidly not only in China — where it seems as many hogs have been culled from herds in that country as there are born in the entire United States in any given year — but also in other parts of Asia, not to mention parts of Europe. Based on our conversations with suppliers to the restaurant industry, and also with privately-held restaurant companies, we believe that commodity-cost risks over the next 1-3 years from proteins may be higher than the Street currently anticipates. The sources of this are many, including: (1) uncertainty regarding just how massive the ASF issue is in China, (2) the time it will take to replenish swine supplies in China — the time from gestation to slaughter is typically more than 30 months, and (3) the not-zero possibility that ASF could make its way to the United States, although efforts are being made on multiple fronts to prevent that from happening. As many involved note, the situation regarding ASF remains fast-moving and difficult to quantify.
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