McAlister's Deli Item 19: $1.79M median ($543K P25, $5.03M P75) across 464 franchised restaurants. Why the extreme cohort spread matters more than the median, and what it tells buyers about trade-area selection.
Quick answer: McAlister’s Deli’s Item 19 reports a $1.79M median across 464 franchised Traditional restaurants — but the median is the wrong number to focus on. The cohort spread is the story: P25 of $543K versus P75 of $5.03M, a 9.3× ratio. That’s one of the widest disclosed in franchising and signals that trade-area selection is essentially the entire deal. McAlister’s amplifies trade-area quality rather than smoothing across it. The brand works spectacularly well in strong sites and uneconomically in weak ones, with limited middle ground.
McAlister’s Deli’s most recent Item 19:
| Metric | Value |
|---|---|
| Sample size | 464 franchised Traditional restaurants |
| Sample criteria | Traditional Franchises |
| Reporting period | Fiscal year 2024 |
| Median annual revenue | $1,792,471 |
| P25 annual revenue | $543,004 |
| P75 annual revenue | $5,027,605 |
| P75/P25 ratio | 9.26 |
| Total system units | 524 |
| Total investment (Item 7) | $910,175 - $2,575,400 |
| Franchise fee | $35,500 |
| Royalty rate | 5% of gross sales |
| Ad fund | 2.0% to 3.0% |
The Traditional-format filter excludes non-traditional formats (smaller-footprint or unconventional locations) that have different economics. The 464-restaurant sample is meaningful by fast-casual standards.
The dominant fact of this disclosure is the 9.26× P75/P25 ratio. For comparison, typical franchise Item 19 disclosures with quartile breakdowns show P75/P25 ratios of 1.6-2.5×. A 9× ratio is an order of magnitude wider — it’s not a slight outlier, it’s a structurally different distribution. The median is essentially meaningless as a predictor of any individual unit outcome.
A 9× P75/P25 ratio across 464 restaurants signals that the McAlister’s operating model amplifies trade-area quality rather than smoothing it. Most franchise brands, by design, produce more consistent unit-level outcomes — the brand operating playbook, supply chain, marketing, and quality controls reduce trade-area variance. McAlister’s appears to do the opposite.
Three factors likely contribute to this:
Menu and positioning are culturally specific. McAlister’s sells Southern-leaning fast-casual deli food — distinctive Sweet Tea, sandwiches with regional appeal, baked potatoes with Southern toppings. In trade areas with cultural fit (Texas, Southeast, the lower Midwest), this drives strong demand. In trade areas without that fit, the menu reads as “out-of-place” rather than “interesting,” which compresses traffic.
Catering is a meaningful revenue layer when it works — and contributes little when it doesn’t. McAlister’s catering operates as an event-and-corporate business. Strong markets with high office density produce $500K-$1.5M of incremental annual catering revenue per restaurant. Weak markets produce $50K-$100K. The catering layer is a binary on/off rather than a continuous lever.
Office-lunch traffic is the daily revenue engine. McAlister’s positions toward the corporate lunch customer. Restaurants near dense office parks, business districts, and corporate campuses produce strong weekday lunch revenue. Restaurants in suburban-residential locations without lunch-traffic anchors produce structurally lower revenue.
The combination of these factors means trade-area selection determines outcome more than operational excellence. A weak trade area cannot be operated into the median; a strong trade area can produce P75+ outcomes almost regardless of operating intensity.
A $1.79M median against $1.74M of investment (Item 7 midpoint) produces a ratio of roughly 1.03×. That’s modest — below the historical 1.5× franchise threshold.
But the median understates the variance. At P25 of $543K against the same $1.74M of investment, the ratio is 0.31× — uneconomic. A restaurant producing $543K of revenue at $1.74M of investment cannot reasonably service the build-out debt, cover operating expenses, and return capital to the owner. P25 outcomes are essentially failed deals.
At P75 of $5.03M, the ratio is 2.9× — excellent. Operators at this performance level produce strong unit economics, rapid payback (often 3-4 years), and natural multi-unit expansion candidates.
The implication for a prospective buyer is that the brand-level median provides no meaningful predictive value for an individual deal. The brand’s range of possible outcomes spans “exceptional” to “failure” depending entirely on the specific site and trade area. Buyers must build their underwriting around the specific demographic data, lunch-daypart traffic patterns, and office-density characteristics of their proposed location, not around the brand’s median.
| Brand | Sample | Median AUV | Investment | AUV/Investment | P75/P25 |
|---|---|---|---|---|---|
| McAlister’s Deli | 464 | $1.79M | $910K-$2.58M | 1.0× | 9.3× |
| Panera | 1,084 | $2.93M | $1.22M-$4.62M | 1.0× | n/a disclosed |
| Jersey Mike’s | 2,255 | $1.29M | $186K-$1.42M | 1.6× | n/a |
| Qdoba | 464 | $1.60M | $885K-$1.6M | 1.3× | 2.4× |
| Moe’s Southwest Grill | 485 | $1.17M | $644K-$1.97M | 0.9× | 1.6× |
McAlister’s outpaces the comparable fast-casual peer set on absolute median AUV but produces the lowest ratio at the midpoint. The 9.3× P75/P25 spread is the brand’s defining characteristic — peer brands show much tighter distributions. A buyer comparing fast-casual options should weigh McAlister’s higher upside potential (P75 of $5M+) against the higher downside risk (P25 of $543K).
For deeper context, see our Qdoba Item 19 deep dive (n=464, similar sample size, much tighter cohort spread).
A new McAlister’s Deli restaurant in months 1-12 — outcome depends heavily on trade area:
Strong trade area (P75+ trajectory):
Median trade area:
Weak trade area (P25 trajectory):
The unusually wide year-one outcome range mirrors the system-level cohort spread. The same operator could run two restaurants in different trade areas and produce radically different year-one results.
For broader category context, see our Panera vs McAlister’s franchise comparison and Item 19 average vs. median. For brand-specific cost detail, the live McAlister’s Deli franchise page.
McAlister's Deli's most recent Item 19 reports a $1,792,471 median across 464 franchised Traditional restaurants for fiscal year 2024. P25 is $543,004 and P75 is $5,027,605 — an extraordinarily wide cohort spread.
The 9.3× P75/P25 ratio is one of the widest in franchise disclosure. It signals that McAlister's unit economics are highly site-dependent. Strong sites — typically dense urban or suburban trade areas with high office density, family demographics, and Southern-cuisine fit — produce $5M+ of revenue. Weak sites — rural, low-density, or markets without strong cultural fit for the menu positioning — produce $500K-$700K. The brand model amplifies trade-area quality rather than smoothing across trade-area variance.
Site selection is the entire deal. A McAlister's in a strong trade area produces excellent unit economics and rapid return on investment. A McAlister's in a weak trade area can be marginally profitable or unprofitable, with no realistic operational path to median performance. Buyers must accept that brand-level averages are unreliable predictors of individual unit outcomes here — the deal economics live in the specific site and trade area.
At the median, it's modest. $1.79M of revenue against $1.74M of investment (Item 7 midpoint) produces a ratio of roughly 1.03×. At P75 ($5.03M), the ratio is 2.9× — excellent. At P25 ($543K), the ratio is 0.31× — uneconomic. The brand-level median ratio is misleading; you need to underwrite to the specific site, not the system median.
Item 7 reports a total initial investment range of $910,175 to $2,575,400 for the Traditional format. The franchise fee is $35,500. Royalty is 5% of gross sales; ad fund contribution runs 2.0% to 3.0%. The investment range is consistent with mid-tier fast-casual brands.
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