Please recommend a Financial/Strategic Analysis framework for a Restaurant Chain

Have done a fair bit of restaurant work on the sellside, and some key metrics you will want to look at (in addition to some of the more macro trends that taking a step back mentions). Most of these you will want to look at in the context of how they compare against peers.

• Same Store Sales (SSS) - yoy growth of the mature store base
• Average Unit Volume (AUV) - avg. sales per mature store
• Average Check
• Sales Mix (Food vs. Beverage (both NA and alcoholic)
• Daypart mix (BF, lunch dinner, late night)
• Average cost to build / Preopening Costs
• Ramp to maturity (ie how long a new location takes to look like a mature store)
• ROI / payback period on new store openings
• If it has franchised locations you will want to look at the start-up costs for franchisees, what their annual fees are (generally ~7% of sales) and any additional annual costs (e.g., marketing)
• There are a few states (CA, MI, ...) that make Financial Disclosure Documents (FDDs) publicly available which can contain some pretty useful info as well
• Black box and knapp track publish monthly sss data on some of the broader segments (casual, fast casual, qsr, etc)
• USDA publishes monthly data on some key food costs (dairy, beef, chicken, etc)
• Based on their geography, you will want to look at minimum wage increases in those states (eg if they have a lot of CA locations, probably going to be difficult to control labor costs at company-owned locations)