- RR’s New Unit Investment Industry Data Report provides average building cost estimate details (excluding land) for 47 national restaurant chains.
- Report highlights: (1) the sales-to-investment ratio for $1B+ chains declined dramatically in 2021 as higher construction costs (partially reflecting longer project completion times) more than off-set growth in new build AUVs; (2) sky rocketing COGs & labor costs are driving sharply lower new build ROI which, in turn, is driving a move towards smaller footprint stores optimized for digital & off-premise as well as increasing use of ghost kitchens; (3) RR’s New Build vs. Buy Ratio rose for the 5th consecutive year (above 2x) as higher construction costs further increase the appeal of acquiring existing stores; and (4) 14 (25% of the $1B+ Chains) introduced a new prototype or significant building modifications (please note RR’s new build cost estimates do not take into account many of the new building design enhancements since they were just introduced within the last year and many are still prototypes – all the same, costs available for the new Jack in the Box prototype reveal a higher ROI for a smaller footprint).