Chipotle Mexican Grill

Consumer confidence in the United States is at an all-time high in seven years, and people are spending more on food prepared outside the home.

SBUX wants to grow sales. It’s also important to manage the operating costs. In this part of the series, we’ll take a look at four key operating costs.

SBUX’s total debt increased from $1.3 billion to $2 billion. It issued long-term debts in 4Q13 and 1Q14. This increased the interest expense by $36 million.

According to McDonald’s management, “strong competitive activity” is affecting its sales. Other fast food chains don’t seem to be feeling the competition.

Same-store sales are driven by two factors: the number of customers walking into the stores and the average amount or average check those customers pay for an order.

The two most important drivers of revenue in a restaurant business are same-store sales and unit growth. Same-store sales growth measures the growth at existing stores or locations over a period of time.

In a company-owned restaurant, the company takes ownership of the operation at the restaurant location. The company uses its own financial resources to get the location ready for business.

Limited-service restaurants can be classified into fast food or quick service, fast-casual restaurants, pizza restaurants, and cafés.

Burger King (BKW) opened a net of 131 new restaurants in the second quarter, making for a total net new restaurant count of 682 restaurants in the past 12 months.

Mainstream channels of marketing—like radio, TV, and print ads—are still common. But many restaurant chains have also used social media to increase their brand presence.

In the last part of this series, we looked at the franchise model. Let’s now take a look at the company-operated restaurant model.

The most common business models in the restaurant industry are for franchised and company-operated restaurants. Let’s look at the franchise model in closer detail.

Restaurants are simple businesses. Because we have to eat every day, people often think the restaurant industry is a safe one to invest in.

As a primary coffee retailer, food has been a relatively minor part of Starbucks Corp.’s (SBUX) focus in the past. But lately, Starbucks has been expanding its product offerings for food.

Starbucks indicates that it uses derivative contracts to hedge commodity price risks. These contracts typically don’t have a lifespan longer than five years.

This business model has allowed Starbucks to be the first coffee firm to put retail locations in each of the BRIC nations and many more.