Reports per $1M Revenue
Our "Reports per $1M Revenue" metric provides a standardized way to compare food safety incidents across restaurants of different sizes and revenue scales. This metric allows us to account for the volume of business a restaurant does, offering a more nuanced view than raw incident numbers or store-based metrics alone.
How We Calculate It
Calculate Total US Revenue
We focus on the total revenue generated from all US stores, including both company-owned and franchised locations (for those brands that franchise).
Importantly, we exclude franchising fees, royalties, and other non-food-sales revenue to ensure we're measuring based on actual food service activity.
For public companies, we typically source this data from their annual SEC 10-K reports.
For private companies or when 10-K data is incomplete, we use one of two methods: a) We calculate an imputed revenue by multiplying the average sales per location by the number of US stores. Typically, the 10-K provides the average sales per location metric. However, for private companies or situations where this information is unavailable, we find this number through research.
b) We conduct thorough research to find reliable US revenue estimates from industry reports or other credible sources.
Example: Chili’s Grill & Bar's parent company, Dine Brands, does not provide total U.S. revenue for both company-owned and franchised store locations in their 10-K report. Therefore, for example in year 2023, we estimated the revenue by using the 10-K provided Average Sales per Store ($5.1 million) and multiplying it by the U.S. store count of 1,231 (The 10-K report provides separate counts for U.S. company-owned and franchised stores, which we combined: 1,130 company-owned locations plus 101 franchised locations = 1,231 U.S. store count), resulting in an estimated U.S. revenue of $6,278.1 million for both company-owned and franchised locations.
Calculate the Metric The formula looks like this:
We take the total number of food poisoning reports associated with the brand for the year.
We divide this number by the total US revenue (in millions of dollars).
Finally, we multiply the result by 1 million to get our "Reports per $1M Revenue" figure.
Why This Metric Matters
This metric is crucial for several reasons:
Revenue-Based Comparison: It allows for a fair comparison between high-volume and low-volume restaurants, as well as between budget and premium dining establishments.
Business Activity Reflection: By basing the metric on revenue, we get a sense of how many incidents occur relative to the amount of food being served.
Scalability: This metric scales well, making it possible to compare small local chains with national brands.
By combining this metric with “Reports per 100 Stores” and “Persons Reported Sick per 100k Customers Served,” we provide a comprehensive, multi-dimensional analysis of a restaurant's food safety performance across various operational aspects.
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