Franchise Glossary
Average Unit Volume (AUV)
What is Average Unit Volume (AUV) in franchising?
Average unit volume, usually shortened to AUV, is the average annual revenue of a single franchise location. It is calculated by dividing the system's total sales by the number of open units. In franchising it is one of the most widely used benchmarks for comparing brands, and it appears most often in restaurant franchising, where a location's sales volume is the headline number. Franchisors that choose to publish financial performance data for existing units disclose it in the franchise disclosure document they must give you before you sign. The critical caveat: AUV measures gross sales, not profit. Two locations reporting the same average unit volume can leave their owners in very different positions once rent, labor, royalties, and supply costs come out, so treat it as the top line and ask separately about the cost structure underneath it. Read the footnotes closely too, because some brands report only their top-performing locations or exclude units open less than a full year, which raises the published figure.
What does AUV mean?
AUV stands for average unit volume. It is the average annual revenue of a single franchise location, found by dividing total system-wide sales by the number of open units. It describes one typical location rather than the whole system.
How is average unit volume calculated?
Divide the system's total annual sales by the number of units open for the full period. Franchisors that publish financial performance data include it in the franchise disclosure document you receive before signing. Read the footnotes closely, because some brands report only their top-performing units or exclude locations open less than a year, which raises the figure.
Is AUV the same as profit?
No. AUV measures gross sales before any expenses. Two locations with the same AUV can leave their owners in very different positions once rent, labor, royalties, and supply costs come out. Treat AUV as the top line and ask separately what the cost structure looks like.
What does AUV mean in a restaurant?
The same thing it means anywhere else in franchising: the average annual sales of one location. The term simply comes up more in restaurants, because sales volume per location is the number the industry leads with. A restaurant brand quoting its average unit volume is describing what a typical location rings up in a year, not what the owner keeps after food costs, labor, rent, and royalties.
What is a good average unit volume?
There is no universal threshold, and a number that looks strong in one category can be weak in another. A quick-service restaurant and a home-based service business have completely different cost structures, so comparing their volumes tells you very little. Compare a brand only against others in its own category, and pair the figure with what it costs to open and operate that location. A high volume carried by high overhead is not automatically better than a lower one with light costs.