Noble Romans Franchise Profits Despite Share Drop
Posted on: 20/11/2006
This compares to a net income of $1,912,538, or $.13 per share, including a one-time gain from the settlement with SummitBridge National Investments, LLC for the three months ended September 30, 2005. Net income for the three-month period ended September 30, 2005 without the one-time gain would have been $388,701, or $.02 per share, on 16.8 million weighted shares outstanding.
Net income for the third quarter of 2006 increased 25.4% over the same period last year without the one-time gain. This increase was the result of royalty and fee income growth, with revenues for the three months ended September 30, 2006 totalling $2,371,540 compared to $2,104,748 for the same period in 2005.
For the nine months ended September 30, 2006, the company reported net income of $1,327,781, or $.08 per share.
This compares to a net income of $3,029,458, or $.18 per share, including the one-time gain from the settlement with SummitBridge National Investments, LLC for the nine months ended September 30, 2005. Net income for the nine-month period ended September 30, 2005 without the one-time gain would have been $1,180,910, or $.07 per share, on 17.0 million weighted shares outstanding.
Total revenues for the nine months ended September 30, 2006 were $6,982,717 compared to $6,317,472 for the same period in 2005. From January 1, 2006 through October 31, 2006, the company awarded 85 franchise agreements for non-traditional locations, 26 dual-branded agreements for traditional locations and three Area Development Agreements calling for the development of 94 dual-branded traditional locations over the next six years.
This compares to 72 franchise agreements for non-traditional locations and three dual-branded agreements for traditional locations during the corresponding period in 2005. The company has franchises in 45 states from coast-to-coast within the United States plus Guam. In addition, it has sold franchise agreements for military bases in Puerto Rico, Guam and Italy, and for entertainment facilities and convenience stores in Canada. In past years the company's growth strategy was to expand primarily through franchising in non-traditional locations.
Beginning in the current year, the company is continuing to focus on franchising in non-traditional locations but has targeted additional growth by franchising traditional dual-branded locations. The Company recently initiated a strategy to sell development territories to Area Developers for additional growth of its traditional dual-branded concept. Area Developers have the exclusive right to develop the dual-branded traditional concept in their area. The Area Developers pay a development fee of $.05 per capita in their development area and receive 30% of the initial franchise fee and 2/7ths of the royalty from the locations developed pursuant to those agreements.
The company retains all training and supervision responsibilities, and must approve all franchisees and all locations. In order to maintain the rights to develop the territory, each Area Developer has to meet the minimum development schedule stipulated in the applicable Area Development Agreement. The three territories that have been sold are a 20-unit Development Agreement for a three county area in Ohio near Cincinnati, a 49-unit Development Agreement for 14 counties in North Carolina and one county in Virginia, and a 25-unit Development Agreement for Sacramento County in California.
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