Thread by @SameStoreGuy

1/ #Restaurant Remodel Thread 🧵

Remodel / capex a big consideration in Restaurant M&A. A look at restaurant capex at various #QSR restaurants 👇

2/ Arby's Remodel

% of System Remodeled: 39%
% Newly built last 7 yrs: 15%

Remodel Cost: $250k-$350k. Current image "Inspire", moving on from "Pinnacle" image that was introduced in 1996. Both interior & exterior finishes

3/ Burger King Remodel $QSR

% of System Remodeled: 33%
% Newly built last 7 yrs: 16%

Remodel Cost: $750k-$850k for "Burger King of Tomorrow" Doesn't pencil for these low volume BKs. Carrol's has reported $150k-$250k for minor remodels

4/ Domino's Remodel $DPZ

% of System Remodeled: Basically 100%
% Newly built last 7 yrs: 24%

Remodel Cost: Pizza Theater $50k (small) and $100k-$150k (large) Redesign to open kitchen to viewing by customers

5/ Hardee's Remodel

% of System Remodeled: 16%
% Newly built last 7 yrs: 16%

Remodel Cost: "Urban Lite" image estimated $300k. System is old and hasn't gotten full buy in from long-time operators

6/ Jack in the Box Remodel $JACK

% of System Remodeled: 6%
% Newly built last 7 yrs: 6%

Remodel Cost: New "craved" reimage rolling out in 2022. Not many costs available and varying programs based on asset age

7/ KFC Remodel $YUM

% of System Remodeled: 62%
% Newly built last 7 yrs: 6%

Remodel Cost: "American Showman" image $275k-$300k, recently increased cost based on updating restrooms (was $200-$250k prior)

8/ McDonald's Remodel $MCD

% of System Remodeled: Basically 100%
% Newly built last 7 yrs: 3%

Remodel Cost: $400k-$450k for interior only. $750k-$800k for full scope EOTF design.

9/ Panera Remodel

% of System Remodeled: 51%
% Newly built last 7 yrs: 26%

Remodel Cost: $150k-$200k. Current G5 remodel incorporates some design elements from current new build prototype

10/ Papa John's Remodel $PZZA

% of System Remodeled: 18%
% Newly built last 7 yrs: 18%

Remodel Cost: No formal program. Last program from 2014-2018 included minor refreshes and ranged from $15k-$20k

11/ Pizza Hut Remodel $YUM

% of System Remodeled: 38%
% Newly built last 7 yrs: 15%

Remodel Cost: $25k-$75k for delivery/carryout only. $100k-$500k for Dine in remodel. Many opting to close dine in store and build new delivery/carryout asset at similar cost to remodel

12/ Popeye's Remodel $QSR

% of System Remodeled: 42%
% Newly built last 7 yrs: 38%

Remodel Cost: $250k-$350k "Modern Popeyes Renaissance" image adding high capacity kitchen and double drive thrus when possible

13/ Sonic Remodel

% of System Remodeled: 13%
% Newly built last 7 yrs: 8%

Remodel Cost: $125k-$150k focusing on new signage and color palette

14/ Taco Bell Remodel $YUM

% of System Remodeled: 79%
% Newly built last 7 yrs: 20%

Remodel Cost: Midterm at $100-$150k. Major remodel $300k-$375k. Most of system at Explorer image (2015) or Live Mas

15/ Wendy's Remodel $WEN

% of System Remodeled: 72%
% Newly built last 7 yrs: 11%

Remodel Cost:
Refresh Lite: $150k-$200k
Refresh: $275k-$400k
Standard Image: $600k-$900k

16/16 Restaurant Remodel Costs in M&A

Make sure you incorporate remodel costs into your financial model. Being wrong here can really screw up your return (IRR)

$YUM $QSR $PZZA $DPZ