FROM THE WOLF DEN

1) Chick-Fil-A Does It AGAIN

Chick-Fil-A’s 2023 financials were released last year, and once again the chicken behemoth delivered big results:

Their average revenue per store was a whopping $9,374,320 per store.

That’s a +6.5% increase from last year, and a 39% increase since 2018. 

The highest performing store generated $19,094,334 in revenue, while the lowest did $2,742,171.

That means the “worst” Chick-Fil-A generated more revenue than the AVERAGE:

• KFC
• Wendy’s
• Burger King
• Taco Bell
• Popeyes

…and a longgggg list of other brands.

Note that the above data factors in 2,049 Chick-Fil-A units that have been open + operating for a full year in 2023, *and* aren’t a “captive venue unit” i.e. they are not located in a stadium or other captive environments. 

The average Chick-Fil-A that is located in a mall does $4,496,740 in revenue (based on 188 mall units). 

Meanwhile, Chick-Fil-A corporate is also raking it in. 

2023 revenue was ~$7.9 billion (note: that’s not systemwide revenue, it’s corporate’s cut from fees/rev share from operators). Meanwhile, net cash flow was ~$2.2 billion!

Once again, this brand continues their dominance. See you in 2025 when they break $10M in avg revenue per store 🫡 

2) Crumbl Returns to Planet Earth

After a ton of speculation about the health of Crumbl, their 2024 FDD went live yesterday. First and foremost, *huge* credit to the brand for continuing their transparent FDD. 

They’ve shown average revenue and average profit year in and year out since their founding.

With that said, the numbers did show a large dip in revenue and even bigger decline in profit:

• Average Revenue: $1,156,838 (down -38%)
• Average Net profit: $122,955 (down -59%)
• 7 locations closed during the year
• Total locations open currently at 1008

The brand also closed 7 locations during the year. 

This is the first year-over-year decline in AUV and profit they’ve had in their short history, as well as the first time they’ve ever had to close a location.

It’s worth noting that as big as these declines are, the average unit still performed better than the typical Pizza Hut or Papa John’s. 

This is a good reminder that In the QSR world 10% net margins are considered par for the course. It’s not considered great, but it’s also not considered bad. Crumbl has, as of now, reverted to standard QSR performance. 

The Big Question

Is Crumbl stabilizing, or is there more pain to come?

“Pain” meaning, more declines in AUV, more declines in profit, and more store closures. Crumbl has an absolute battle on their hands to prove that their model can support a footprint of 1,000 stores.

It’s clear that they made moves prior to 2024 to prepare for this, with decisions to rebrand from Crumbl cookies to Crumbl, and adding new non-cookie menu items, such as tres leches cake.

All in all, there’s no sugar coating it: this is a big year for the brand….we’ll see how the cookie crumbles in 2024 🥁.

3) Jersey Mike’s Acquisition?!

Over the weekend, news broke that Jersey Mike’s was in discussions with Blackstone over a possible sale, valued as high as $8 billion!

The brand – which I recently covered about a month ago – was founded in 1956 and has been franchising since 1987.

As a Jersey native, the brand is one of my favorites, and the story behind the long-time CEO is pretty incredible (acquired the location off the original owner as a 17 year old, skipped college to run it, and still is the CEO to this day!).

To be honest, hearing the news that they may be selling to Blackstone of all groups, was a bit disappointing. Anytime a company you love is potentially being gobbled up by the biggest private equity firm in the entire world, it just feels….sad? You can’t help but think it will lose the intangible vibe that has made it special up to this point.

Even so, Peter Cancro is an incredible entrepreneur. He took the risk and put in the work, so who am I to say who he should and shouldn’t sell to?

Thankfully… it looks like a false alarm

Thanks to my franchise pal JT Singh, it looks like Peter sent out an email to his franchisees to let them know that the deal rumors are inaccurate.

Cancro also mentioned that they’d inform franchisees “directly” should a major change of ownership be in process. 

So for now, we can rest easy and continue to enjoy our (non-private equity owned) Jersey Mike’s 😀.

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EXTRA SAUCE 💥

Hershey’s Ice Cream vs Hershey’s Chocolate
In 1894, two companies with the same name, started in the same county in Pennsylvania (Lancaster). Despite the similarities, the companies are completely unrelated – but their shared brand would cause decades of bitterness. Read here for this Wolf Original 🍟.

Chipotle, Starbucks and more raise prices by as much as 7-8% in California/
In light of California’s new $20 minimum wage bill for fast-food workers, which went into effect on April 1, restaurant chains and franchisees are already taking action, in some cases by raising prices by as much as 7-8% for select menu items in the state.

Five Iron Golf Nabs $20 Million Investment From Enlightened Hospitality
Five Iron Golf SVP of Strategy Morgan Dunnan wants golf to be the new bowling. “With bowling, someone says ‘Let’s go bowling’ and no one’s like, ‘I don’t bowl,’” he said. But with golf, the response is often the opposite. “Part of our goal is that when somebody says, ‘Let’s go to Five Iron to go golfing,’ there’s not that reaction of ‘I don’t golf.’”

Jersey Mike’s Subs Raises $25 Million in March For Local Charities Nationwide
Jersey Mike’s Subs and customers across the country rallied to raise over $25 million to help more than 200 local charities during the company’s 14th Annual Month of Giving in March.