Question 1

What is same-store sales growth?

Accepted Answer

Same-store sales growth (also called comparable sales or 'comps') measures revenue growth at established locations — specifically excluding any locations opened in the past 12-18 months. It isolates organic performance from new store contributions, giving a cleaner picture of whether existing units are growing. A chain can show 20% total revenue growth purely from new openings while existing locations decline — comps reveal the truth.

Question 2

Why do investors prefer comps over total revenue growth?

Accepted Answer

Total revenue growth can be gamed by opening new locations that dilute the same customer base or that open before reaching maturity. Comps strip away that noise. Sustained positive comps signal that the concept is resonating, marketing is working, and the customer base is growing organically. Negative comps while total revenue grows is a red flag — it suggests the business is cannibalizing itself or that new locations are propping up a declining core.

Question 3

What are good comps for a restaurant?

Accepted Answer

Industry context matters. Casual dining restaurants consider 2-4% annual comps healthy in a normal environment; QSR (quick service) targets 3-6%; fast casual targets 4-8%. During inflationary periods, comps can be inflated by menu price increases — traffic comps (unit volume growth, not just dollar growth) are a purer signal. A strong year might show 8-12% comps; declining comps for 2+ consecutive quarters triggers investor concern.

Question 4

How do I present comps to a franchise investor?

Accepted Answer

Show quarterly comps over at least 2 years to demonstrate trend. Separate price-driven comps from traffic-driven comps if possible — traffic growth is more durable than inflation-driven price increases. Compare to industry benchmarks (Black Box Intelligence publishes quarterly restaurant industry comps). If your comps exceed industry average, highlight it — it means your concept is gaining market share while competitors stagnate. For franchise investors, strong comps are the primary evidence that the unit economics work.

Question 5

How do I handle negative comps in a presentation?

Accepted Answer

Acknowledge negative comps directly — investors will see it in your data. Explain the cause: macroeconomic pressure (inflation affecting consumer spending), specific market factors (new competitor nearby, construction), or internal issues (menu change that didn't land, service quality decline). Most importantly, show what you've done to address it and early evidence of recovery. Investors who see a transparent acknowledgment of a problem plus a credible turnaround plan respond better than those who feel the problem was hidden.

Same-Store Sales Growth Chart

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FAQ: Same-Store Sales Growth Chart