Firehouse’s Unit Growth to Hit ‘High Gear’ in Coming Years

Cafe Makes Global spent $1 billion to acquire Firehouse Subs final calendar year, and the rapidly casual’s quantities confirm it was value each individual penny.

The brand’s domestic very same-retail store sales grew 15.2 p.c year-about-year in the fourth quarter, and 23.4 percent on a two-12 months basis. As for 2021, Firehouse’s U.S. comps lifted 21 per cent and 20.6 percent across two a long time.

The company’s comp revenue and record-large $900,000-plus AUV drove systemwide sales of approximately $1.1 billion final year, in contrast to $872 million in 2020. Much more than 27 % of these income came as a result of electronic channels.

Firehouse accomplished 2021 with 1,213 models worldwide—net expansion of 19 restaurants—including 1,164 domestically and 49 internationally.

“These spectacular final results are a testament to the energy of the manufacturer, its unique menu choices, its objective-led general public safety determination, and its seasoned management team,” RBI CEO Jose Cil stated throughout the company’s Q4 and 2021 earnings contact. “It’s all of these aspects that make us so confident in Firehouse Subs extended-term progress and expansion opportunity.”

RBI is keen to change Firehouse’s unit development into “high equipment in the coming decades,” equivalent to what it’s performed with Popeyes, in accordance to Cil. 

Final calendar year, the rooster leader knowledgeable the maximum quantity of openings considering that RBI obtained it in 2017. Popeyes completed 2021 with 3,705 restaurants globally—a web of 254 merchants, or unit expansion of 7.4 %. That overall breaks down to 2,754 U.S. spots (web of 146 places to eat) and 951 international shops (internet of 108 dining establishments).

Go through Far more: Burger King’s Multi-Yr Turnaround is Underway

Cil reported the chain “signed much more growth agreements about the earth than ever in advance of,” with offers in India, the U.K., Saudi Arabia, Romania, and France, as properly as more growth in Mexico, the U.S., and Canada. In 2022, Popeyes ongoing its momentum with an arrangement in South Korea, which Cil called a single of the premier rapid-provider rooster marketplaces in the entire world.

Despite the fact that unit progress keeps soaring, Popeyes U.S. similar-keep income dropped 1.8 percent in Q4 yr-in excess of-yr, and 8.2 per cent on a two-year stack. Cil mentioned ongoing labor problems led to reduced functioning several hours, which impacted comps by roughly 1 p.c. The CEO also noted the Popeyes Rooster Sandwich remains pressured by a quantity of rivals in the “chicken sandwich wars.”

Irrespective of the product sales drop, Cil stated new and existing franchisees about the state continue being enthusiastic simply because of the unit economics. 

“We are experiencing as we do with all brand names in the U.S. and in more mature markets—there’s a good deal of level of competition,” he mentioned. “That’s aspect of the business enterprise. But we assume we have a differentiated product with the chicken sandwich as well as our nuggets that have been introduced.”

“A whole lot of the innovation pipeline that we have on handheld rooster, we believe will allow us to continue to develop extended-term,” he continued. “The organization investments in digital as effectively, we consider, are important drivers of advancement for the brand in the U.S. in quarters and a long time to come. And we believe you will find a huge opportunity listed here.”

Tim Hortons seasoned favourable internet unit expansion, as effectively. The coffee chain ended very last 12 months with 5,291 outlets globally—a 6.9 percent boost yr-over-12 months. That determine contains 3,949 dining establishments in Canada (internet of 13 shops) and 1,342 internationally (web of 329 retailers).

Canada comps enhanced 11.3 % in Q4, but slipped .6 p.c on a two-year check out. Even now, it is an acceleration from Q3, when comps improved 9.5 %, but dropped 4.2 % on a two-calendar year foundation.

“We are two years into our back-to-principles system and keep on to see encouraging evidence details that our concentrate on elevating core high-quality, innovating for progress and modernizing the model is positioning Tims perfectly for extensive-phrase progress in Canada,” Cil said.

General, RBI completed the year with far more than $10 billion in digital profits, mixing far more than 30 per cent. In Q4, digital at Tim Hortons Canada accounted for more than 33 percent of sales—an all-time large. Popeyes and Burger King’s U.S. marketplaces observed digital blend of 16 per cent and 9 per cent, respectively.

Main Working Officer Joshua Kobza attributed digital advancement to expansion in delivery, increases in cell purchasing, and ongoing traction of loyalty.

“2021 marked the initially 12 months we had loyalty across all our manufacturers in property markets,” Kobza reported. “While Burger King and Popeyes are previously on in their journeys, all through the yr, Tim Hortons transitioned its loyalty method from just one focused on creating a strong user foundation to regularly driving similar profits and as a consequence, observed the greatest profits contribution from royalty to date.”