An ambitious franchisee like you knows the importance of learning the metrics of a franchise before signing an agreement. One of the most important numbers to know is a franchise’s average unit volume (AUV), but what is AUV and how does it factor into evaluating a franchise? Let’s look at what an AUV means, how it’s calculated, and other metrics to consider when looking at franchises like Pearle Vision.
The Meaning and Importance of AUV
First, let’s answer the primary question: What is AUV? AUV is the average amount of sales generated by the individual franchise locations in a specific brand over a year. For example, Pearle Vision has a $1,214,000 AUV, which means each Pearle Vision Center has, on average, $1,214,000 in sales in a year, according to our most recent franchise disclosure document (FDD). You calculate a franchise AUV by taking the total annual sales of all company-owned and franchised units in the brand and dividing it by the total number of units. As a metric in franchising, AUV serves as a measure of general financial success on a unit-by-unit basis.
Understanding what AUV is can be extremely useful when assessing a franchise opportunity. You get a good idea of how a brand is performing and can compare AUVs of different brands. High AUVs are a good sign of a strong brand with an effective business model.
AUV vs. Profitability
It’s important to note that AUV isn’t the same thing as profitability. According to an August 2024 report from financial publication Investopedia, profitability is the extent to which a company earns a profit overall. It doesn’t compare sales on a location-by-location basis, so it doesn’t speak to unit profitability. Also, the Federal Trade Commission (FTC) doesn’t allow franchisors to make earnings claims, which precludes making profitability claims.
AUV represents past profits and is not a guarantee of future earnings. A franchise brand’s AUV is affected by multiple factors, including:
- Industry
- Unit locations
- Franchisee commitment
- Marketing
- Staffing
- Training
- Hours of operation
- Types of products and services offered
You should consider these factors as well as the kind of training and support a franchisor offers. Pearle Vision provides franchisees with location selection assistance, marketing assistance, initial and ongoing training, exclusive eyewear products to offer, and more.
Other Critical Franchising Numbers
An AUV is an important metric in evaluating a franchise’s potential for success, but it’s not the only one. Additional metrics to consider include:
- Initial investment ranges
- Unit profit margin – amount by which revenue exceeds costs for a franchise
- Franchise growth – number of units a franchise brand has and how they’ve been increasing over the years
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) – how much revenue a franchise has before deducting taxes, debt interest, asset depreciation, or amortization effects
Get a Clear View of Potential Success with Pearle Vision
We welcome the chance to show you our franchise earnings and discuss how an ambitious entrepreneur like yourself can flourish as a Pearle Vision franchisee. Our proven business model has served our franchisees well since 1981, and as of 2023, we have 570 units. Get started by filling out a franchise form today to learn more about your franchising opportunity with Pearle Vision.
