Mr. Belatti: We have been diligently pursuing the business model that we laid out a couple of years ago which is to continue to grow our company through franchising. One of the primary drivers of our growth is unit-openings and we have been doing that at a rate of about 450 units per year. We also are expanding margins on the business as our revenue growth continues to be driven more from franchise revenues, royalties and fees. And we continue to look at how to best structure our portfolio for the future to maintain stakeholder value.
TWST: What has been the impact on your business of this rather
difficult environment that we have been operating in for the past
year or so?
Mr. Belatti: Last summer we announced that we had begun to see
some softening in the market place. We may have been one of the
earlier chains affected by this because of the rather large
ethnic base of consumers that we have. We started to see some of
the softening because they have been hit harder by the economic
conditions than some other groups such as higher gas prices,
lower consumer confidence, lower disposable income and higher
unemployment. These are higher among African-Americans and
Hispanics and clearly are factors that affect the business. So
after about 10 years of positive comparable sales growth, we
began to see some softening and ended last year at nearly flat.
We continue to deal with that as effectively as we can, trying
really hard not to use the discounting ploy but to simply offer
good value, good variety, good food, better guest experience and
ride out the storm.
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