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What Does Average Unit Volume (AUV) Mean in Franchising?

What Does Average Unit Volume (AUV) Mean in Franchising?
What Does Average Unit Volume (AUV) Mean in Franchising?
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Are you interested in learning exactly what average unit volume (AUV) means in franchising?

At Jack in the Box, our AUV is one of the most widely discussed numbers you’ll find on our website and in our Franchise Disclosure Document (FDD).

In this article, we’ll go over what the term “average unit volume” means in the Franchise Industry and where you can find it.

What Does Average Unit Volume Mean?

In franchising, average unit volume is calculated by dividing the total annual sales of company-owned and/or franchised units divided by the number of company-owned and/or franchised units.

Why Is Average Unit Volume Important?

Average unit volume is a metric that gives potential new franchisees the ability to review current performance and compare one brand in the same sector to another.

Potential franchisees can use AUV to assess the hypothetical profitability of their investment and help them find the best franchise opportunity for their needs.

Is AUV the Same Thing as Profitability?

No, based upon Federal Trade Commission guidelines, all franchisors are precluded from providing earnings estimates or profit potential to franchisees.

However, you can get an idea of annual revenue by referencing the Item 19 Financial Performance Representation in the Franchise Disclosure Document. This will typically include a chart with previous sales and text with more information about the data.

It’s important to understand every brand calculates their AUV differently. Be sure to check the footnotes underneath the Item 19 Table for more information.

Key Factors That Affect AUV

There are a wide range of factors that can play into the average unit volume for each franchise brand. Here are some of the most common:

  • Location, Location, Location
  • Commitment to Following Franchise System
  • Industry
  • Marketing
  • Staffing / Training
  • Hours of Operation
  • Menu Variety

Factors like these play an important part in the revenue generated by each location. If you’re thinking about investing in a franchise, be sure to research the system’s AUV and ask questions.

What’s the Average Unit Volume of Jack in the Box?

The average unit volume (AUV) of Jack in the Box is $1,996,940 as outlined in Item 19 of our Franchise Disclosure Document.

This number comes from Table 1 and includes historical gross sales at franchised restaurants in the continental USA for the 12-month period between September 30, 2021 and September 30, 2022.

The term “gross sales” means all revenue from the sale of all products and services including delivery and catering services as well as from vending machines and similar sources of revenue.

It also includes other income of every kind and nature related to the Restaurant including proceeds from stored value gift cards when redeemed but not when purchased, business interruption insurance, and revenue from off-site events. Certain amounts are excluded from Gross Sales.

The gross sales for each restaurant will depend on a wide range of factors, but the AUV from Item 19 gives you an idea of what to expect.

Check Out These Additional Resources

We hope this article gave you a better understanding of what average unit volume means in franchising.

At Jack in the Box, we work with our franchisees every step of the way in order to get their restaurants up and running.

Here are some additional online resources you may like to check out:

If you have any questions, please contact our franchise sales and support team.

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