How Big Chefs’ efficiency drive affected franchise revenue

Big Chefs’ total revenue for the first nine months of 2026 fell by 5.5% year on year to TRY 4 billion. In its financial disclosure published on 28 October, the company cited efficiency measures across its franchise network among the reasons for the decline. Another notable feature of the results was an increase in net sales per outlet, despite the company operating fewer outlets during the period.

Seeking greater efficiency with fewer outlets

According to the disclosure on Türkiye’s Public Disclosure Platform (KAP), carried by Matriks on TradingView, Big Chefs removed outlets operating below its profitability threshold from its portfolio following a strategic decision in 2025. As a result, the average number of outlets operating during the first nine months of 2026 was six lower than in the comparable period. This difference refers to the average outlet count over the period; it should not be read simply as the number of closures during the current year.

The company attributed the 2.5% decline in system-wide net sales to this deliberate reduction in its network. Over the same period, net sales per outlet rose by 2%. The disclosure also stated that the operating profit margin was higher than a year earlier.

These results show that total sales volume and performance per outlet did not move in the same direction. Big Chefs’ stated approach focuses on improving the efficiency of its existing network rather than maintaining outlet numbers. However, the increase in sales per outlet did not offset the decline in total revenue. When assessing the company’s results, it is important to distinguish between the size of the network and the performance of its operating outlets.

All three franchise revenue streams declined

All three reported franchise revenue streams recorded year-on-year declines. Revenue from franchise product sales fell by 14.3% to TRY 397 million, while royalty income declined by 6.2% to TRY 299.9 million. Initial franchise fee income fell by 5.9% to TRY 26.4 million.

The company said the loss of income from franchise outlets closed as part of its efficiency measures was a key factor behind the decline in product sales and royalty income. The removal of these outlets therefore affected not only system-wide sales but also the different revenue streams the company earns from its franchise network.

The 14.3% decline in product sales revenue was steeper than the falls in the other two reported franchise revenue streams. However, these percentages relate to different types of income. They should be assessed separately rather than treated as a single measure of franchise sales. The disclosure specifically highlighted the impact of franchise outlet closures on product sales and royalties.

For the franchise sector, the figures demonstrate how restructuring a network can directly affect revenue. In Big Chefs’ case, removing outlets below its profitability threshold also meant losing the income generated by those locations. Its efficiency drive therefore represents a performance objective distinct from growth in total revenue.

Revenue and the bottom line should be assessed together

Big Chefs did not attribute the decline in total revenue solely to changes in its outlet portfolio. It also cited challenging macroeconomic conditions, adverse weather during the period and the effect of capital market volatility towards the end of the period on its customers’ spending behaviour.

Alongside optimisation measures in the franchise network, temporary closures of some outlets for refurbishment also affected revenue. This distinction matters: outlets removed from the portfolio and those temporarily closed for refurbishment represent different reasons for changes in operations.

Over the nine-month period, the cost of sales fell by 5.1% to TRY 3.23 billion. Gross profit declined by 6.8% to TRY 769.8 million, while the gross profit margin slipped from 19.5% to 19.3%. The company reported a net loss of TRY 30.9 million for the first nine months of 2026, compared with a net profit of TRY 26.4 million in the same period of 2025.

The improvement in the operating profit margin should therefore not be confused with the net result for the period. The reported results combine higher sales per outlet and an improved operating margin with lower gross profit and a net loss.

Selective approach to new agreements will continue

Big Chefs said it was maintaining a selective approach to new franchise agreements, taking account of high operating standards and its profitability threshold. The company plans to increase revenue in future periods through the contribution of new franchise outlets added to the network as part of its efficiency strategy. This is a statement of future plans, not a report of revenue growth already achieved.

The central message of the disclosure is that franchise network growth is being assessed against efficiency criteria rather than outlet numbers alone. The current results show both the downward pressure this approach has placed on revenue and the increase in sales per outlet.

Practical takeaway: When assessing a franchise investment, look beyond the total number of outlets. Consider sales per outlet, the different franchise revenue streams and the net result for the period together.