Restaurant Incubator Index-Fact Sheet

 

 

Index gained 3.22 points this month (moving from 1039.42 to 1042.64). This gain makes eleven straight positive months. The month’s solid growth is largely due to merger activity. Our policy is to include merged counts in the overall index. We do not feature companies with growth through merger in our Highlights. Only organic growth is featured in the highlighted companies.

 

Highlights:

Upside Momentum Provided By:

Pei Wei Asian Diner added 12 units (8%);
Stan Ware Enterprises added 8 units (36%);
Dickey’s BBQ Pit added 8 units (10%); and,
Shane’s Rib Shack added 9 units (13%).

Downside Momentum Provided By:

Pick Up Stix closed 26 units (-21%);
Daland Corporation closed 16 units (-15%);
Frullati Café & Bakery closed 9 units (-13%); and,
Port City Java closed 6 units (-12%).

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The index reflects the change in the total number of units for our Restaurant Incubator tracking group. The group is designed to track the growth of small chains into large groups. Monthly integration is now possible and results are now reflected each calendar month which began in July 2006. RII measures growth trends in the small chain segment of the greater multi-unit restaurant industry. Over 3,000 chains are reviewed each month and are used to adjust the index. The RII base is its 2,700 January 2006 members. These chains had a total of 53,914 units at the end of January 2006 and these units are represented in the base value of 1,000. The RII is the best measure of the growth in small restaurant chains available.

Construction/Methodology

Membership:

· A restaurant chain or group with at least 3 units.
· A restaurant chain or group with fewer than 200 units.
· A U.S. or Canadian company.
· A restaurant chain or group with reliable information available regarding unit counts and activity.

Weighting

· The indexes are weighted by the base unit count. The base unit count for each chain used in the index formula is the number of units for the chain at the time their addition occurred. The initial 2,700 chains and their 53,914 units are tied to the base value of 1,000. Chains added each month are excluded from the calculation in the month of addition. The unit count from new chains is added to the base units for use in future months’ calculations.

Index Calculation

Each month, the total number of units in member restaurant chains of the previous month is divided by the base unit count. This factor is then multiplied by 1,000.

Adjustments and Maintenance

Restaurant chains may be added to and deleted from the index over time. The following rules govern this activity:
· New chains may be identified with 3 or more units.
· Existing chains may be removed due to mergers, acquisitions, bankruptcies, information inconsistencies and a drop in unit count.
· New chains will not impact the index in the month they are added.
· Initial base unit counts for deleted chains will remain in the base unless there are information inconsistencies.
· Previous month index values may be restated if the activity caused by mergers, acquisitions and information inconsistencies warrants a complete removal of a chain.

 

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Disclaimer

The information used in the Restaurant Incubator Index has been obtained from sources we believe to be reliable, but its accuracy and completeness are not guaranteed. RestaurantChains.Net reserves the right at any time and without notice to change, amend, or cease publishing the information. It has been prepared solely for informational purposes, and is not an offer to buy or sell, or a solicitation of an offer to buy or sell, any security or instrument or to participate in any particular trading strategy. It is made available on an "as is" basis. RestaurantChains.Net does not make any warranty or representation regarding the information or the results to be obtained by anyone from using the information. Without prior written permission from RestaurantChains.Net, none of the information that appears on this site may be reproduced, in whole or in part, in any form, other than for your own personal, non-commercial use. Index figures are based upon historical information and are not intended to indicate future industry growth rates.