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Schlotzsky's, Inc. (BUNZQ) Message Board

  • KnowYourWorth KnowYourWorth Aug 20, 1999 4:53 PM Flag

    Please Stop!

    I�m not a frequent contributor to this board, but
    I am a devoted follower/no longer investor of this
    stock. I have always enjoyed the posts, most of which
    are professional, insightful and thorough. The recent
    posts using foul language should be removed from the
    board and I am requesting Yahoo to do so immediately
    after this post. You may not agree with Scam, Doggy or
    the rest of the regulars on the board but at least
    there are reasons behind their comments.

    Please
    stop with the insulting, vulgar remarks. I find them
    very offensive and I don�t even like Mr. Scam.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • BUNZ still has better fundamentals than most
      companies in the restaurant business. Just did a quick
      survey in the industry of things like debt/equity ratio
      and profit margin. BUNZ looks great in these areas.
      Many other restaurant companies are mired in serious
      debt. BUNZ is not. There is absolutely no comparison to
      Boston Chicken.

      The street doesn't like it right
      now because BUNZ is changing its concept, and it has
      not yet proven that the new concept works.
      The
      last quarter, BUNZ forced some of its franchisees to
      close shop because their stores were dirty, run-down
      and ugly. Plus those stores weren't making much money
      anyway. As far as I'm concerned, this is not a bad a
      thing.

      Some of the new stores I have seen have REALLY
      impressed me. One store in Dallas has 3 cash registers
      running at the front of the store, plus a drive through,
      plus cash register for phone-in orders. And all of
      them run full tilt at lunchtime. That's 5 times as
      many cash registers as an old-style store in a
      strip-center with only one cash register.

      Schlotsky's
      just has to prove that this concept works, and from
      what I have seen with my own eyes, it is working
      great. The street is nervous because the street doesn't
      like to see change without proof that the change
      works. This past quarter we saw some charges on the
      balance sheet that reflected the cost of going through
      this change, and the street has reacted
      badly.

      What I see is a company with great product, great
      fundamentals, and decent though not spectacular growth, and I
      see Wall Street analysts running away from the
      company. Now is the time to buy.

      Sure, the new
      stores are expensive, thats the main complaint right
      now. But what you end up with is a restaurant more
      like a Chili's and less like Al's Grease Burger Shack.
      Schlotsky's image is very important. If you are going to pay
      $4.50 for a great sandwich vs. $2.50 for a grease
      burger, your store better be clean and good looking.

      • 1 Reply to kknauber
      • I haven't done an industry survey so I'll take
        your word that despite massive balance sheet
        deterioration BUNZ is still better off than many
        restauranteurs. Investors don't care much about numerical
        snapshots, though, they care about the future. They tend to
        predict the future by extrapolating trends. BUNZ's trends
        are all bad.

        If investors have tremendous
        confidence in management or some expectation of a change in
        the business cycle they'll sometimes buy into the
        idea that the trend is about to reverse. Neither
        applies to BUNZ.

        Schlotzky's must do more than
        prove that the new stores work. They must prove they
        can operate and grow their franchise in a cash
        efficient manner. There was a time when they were doing it.
        The last 18 months they have not. If you see any
        evidence they are back on the right track I'd be delighted
        to see it. I'd like nothing more than a good reason
        to load up on the stock (or simply take it private).

 
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