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Frisch's Restaurants, Inc. Comm Message Board

  • algo41 algo41 Nov 10, 2003 5:51 PM Flag

    Golden Corral, Part II

    We will be doing promotional programs, in-store programs and
    crew incentive programs all built around the race," said Bob McDevitt,
    senior vice president of marketing and franchise operations.

    Meanwhile, Golden Corral plans to continue growing its franchise system.

    "In this year's strategic planning process . . . [one] key issue is . . . [to]
    continue to attract food operators to our system to help us fill in markets
    with development potential and . . . to establish a Golden Corral presence
    in new undeveloped markets," Fowler declared.

    Golden Corral expects to end the 2003 fiscal year with 122
    company-owned restaurants and 351 franchised units in its system. Total
    sales in franchised units are expected to be about $900 million, or 71
    percent of the projected 2003 systemwide sales of more than $1.25 billion.

    "Systemwide sales will be around $100 million higher than [those of] 2002,
    or a gain of about 8 percent," said Larry Tate, the company's senior vice
    president of franchising.

    Tate told his audience that the
    company has 184 new franchise
    markets under area development
    agreements for expansion over the
    next five years. He said the new units
    are expected to add $652 million to
    systemwide sales.

    New markets are slated to be
    developed in Detroit, Chicago, South
    Florida, Georgia and California.

    Golden Corral currently builds
    restaurants in three different sizes. Its
    11,700-square-foot model seats 468
    customers. The chain's medium-size,
    10,300-square-foot prototype has
    seating for 384 people, and its
    7,800-square-foot unit seats 282.

    Tate said profit, as measured by cash
    flow from operations, for the largest
    units is averaging 18.4 percent of
    sales, and the other two models
    generate cash flow of 15.7 percent of
    sales. That group includes some very
    old units.

    New Golden Corral units are much more profitable. The company said
    annualized sales for a typical new Golden Corral restaurant in 2002
    exceeded $3 million, and net operating income exceeded 21 percent.

    The company still has 110 "standard" units built in small towns between
    1973 and 1988 that are 5,000 square feet and seat 275 patrons. Those
    units have salad bars, but not buffets.

    "Standard units that have been remodeled show a 10.1-percent
    improvement in sales trend before and after, and remodele

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