What is included in the 'Labor - Total' calculation for Churchs Chicken restaurants?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
beverages, paper and promotional items (i.e., limited-time offerings) to the Restaurants. Delivered costs include distribution and freight costs. The calculation of food costs is primarily a function of the mix of products sold and the cost of commodities that comprise the products.
- D. "Labor - Total" includes unit hourly labor, which is comprised of the average hourly rate and the number of hours worked (a direct correlation to sales volume). The cost of labor will vary from location to location and will be dependent on factors beyond our control,
including, without limitation, local minimum wage laws and local labor market conditions. Labor costs also include the salaries of general and assistant managers. Most company Restaurants employ one salaried general manager and one salaried assistant manager. The other components of labor expense are: payroll taxes, health insurance, vacation, wages, sick pay, bonuses and workers' compensation insurance. Also, with respect to labor costs, because a certain number of employees will be necessary to open and operate a Restaurant irrespective of its Gross Sales, units that have lower than average Gross Sales probably will experience higher than average labor costs.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 55–62)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the 'Labor - Total' calculation includes several components related to employee compensation. It starts with unit hourly labor, which is determined by multiplying the average hourly rate by the number of hours worked. This figure is directly related to sales volume, meaning higher sales typically require more labor hours.
In addition to hourly labor, the 'Labor - Total' calculation also incorporates the salaries of general and assistant managers, with most company-owned Churchs Chicken restaurants employing one of each. The remaining components of labor expense factored into the total are payroll taxes, health insurance, vacation pay, wages, sick pay, bonuses, and workers' compensation insurance.
The FDD notes that labor costs can vary significantly based on factors like local minimum wage laws and labor market conditions, which are outside of Churchs Chicken's control. The document also points out that restaurants with lower-than-average gross sales may experience higher-than-average labor costs because a minimum number of employees are needed regardless of sales volume. The FDD also cautions that franchisees may use different accounting methods, potentially booking labor costs under different categories than those used in the provided financial representations.