McDonald’s Corporation franchises and operates more than 36,000 fast-service restaurants around the world. Buffalo Wild Wings franchises and operates more than 1,000 restaurants in North America. Buffalo Wild Wings features chicken wings and a full bar in its restaurants. Financial information for each company follows. The data for Buffalo Wild Wings predates its acquisition by Inspire Brands in February 2018.

Required:

1. Determine the amounts of sales revenue per company-owned store and franchise fees per franchised store for each year and each company. In these computations, use the average number of stores open during the year.

2. Assume that for both companies sales at company-owned stores are the same (on a per store basis) as sales for the same company’s franchised stores. Estimate each company’s franchise fee rate, which is stated as a percentage of each franchisee’s sales revenue.

3. Perform a cause-of-change analysis from 2008 to 2012 for each company to disaggregate the increase in revenues from company-owned stores between growth in the average number of average stores open and growth in revenues per store. Also perform a cause-ofchange analysis from 2012 to 2016.

4. Perform similar analyses for franchise fee revenues.

5. What do your analyses from requirements 3 and 4 tell you about the companies’ growth strategies and how they differ from each other and over time?

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Selected Financial Data Buffalo Wild Wings 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of stores operating at yearend: Company-owned 161 197 232 259 319 381 434 491 596 631 Franchised 332 363 420 473 498 510 559 591 579 609 Revenues ($ in millions): Company-owned store sales $379.7 $488.7 $555.2 $717.4 $ 964.0 $1,185.4 $1,423.0 $1,715.0 $1,891.6 Franchise fees 42.7 50.2 58.1 67.1 76.6 81.4 93.2 97.7 95.2 Total 422.4 538.9 613.3 784.5 1,040.6 1,266.8 1,516.2 1,812.7 1,986.8 McDonald's 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of stores operating at year-end: Company-owned 6,906 6,502 6,262 6,399 6,435 6,598 6,738 6,714 6,444 5,669 Franchised 24,471 25,465 26,216 26,338 27,075 27,882 28,691 29,544 30,081 31,230 Revenues ($ in millions): Company-owned store sales $16,560.9 $15,458.5 $16,233.3 $18,292.8 $18,602.5 $18,874.2 $18, 169.3 $16,488.0 $15,295.0 Franchise fees 6,961.5 7,286.2 7,841.3 8,713.2 8,964.5 9,231.5 9,272.0 8,925.0 9,327.0 Total 23,522.4 22,744.7 24,074.6 27,006.0 27,567.0 28,105.7 27,441.3 25,413.0 24,622.0