Kelly Kitchens operates both franchised and company-operated restaurants under the brand name Kelly Kitchens. Operating income, sales, and invested assets for both segments are provided as follows:

a. Determine the profit margin for company-operated and franchised restaurants. Round to the nearest whole percent.

b. Determine the investment turnover for company-operated and franchised restaurants. Round to two decimal places.

c. Use the DuPont formula to determine the return on investment for company-operated and franchised restaurants.

d. Kelly Kitchens is expanding to the Midwest. How would you advise management regarding the use of company-operated versus franchised restaurants in the expansion?

Transcribed Image Text:

Franchised Company-Operated Operating income Sales Invested assets $ 180,000 $192,000 240,000 600,000 1,500,000 150,000