Noble Roman's: Take 'n' bake to continue to build revenue in Q2 2010
May 6, 2010
Noble Roman's has released its first quarter earnings for the period ending March 31, 2010. While income and revenue were down, the company attributes a chunk of revenue to its new take ‘n' bake offerings at various grocers during the quarter.
Net income was $351,667 compared to $416,761 for the quarterly period ended March 31, 2009, a decrease of 16 percent.
Total revenues for the quarterly period ended March 31, 2010 were $1.8 million compared to total revenues of $1.9 million for the comparable period in 2009, a decrease of 5 percent.
No comps figures were released.
The company recently developed a take-n-bake version of its pizza as an addition to its menu offerings. The take-n-bake pizza is designed as an add-on component for new and existing convenience store franchisees and as a stand-alone offering for grocery store chains. President Scott Mobley said take ‘n' bake offerings represented a significant amount of revenue for the quarter.
"In the first quarter, the additions to revenue from take 'n' bake was approximately $45,000. That represents our fee income," Mobley said. Actual sales numbers for the items are much higher, he added.
"A large number of the units that opened so far are selling take 'n' bake opened during the first quarter, so I think we'll see that number grow substantially in the second quarter."
Since the company started offering take-n-bake pizza to grocery store chains in September, 2009 through March 31, 2010, the company had signed agreements for 93 grocery store locations to operate the take-n-bake pizza program, 79 of which were opened at that time. As of April 30, 2010, the company had signed agreements for 155 grocery store locations to operate the take-n-bake pizza program, 101 of which were open at that time and anticipates the remainder of the 155 locations to open during the first three weeks of May, 2010. The company expects to sign agreements for several additional locations with existing chains and is also in discussions with several new grocery store chains.
The take 'n' bake program has also been integrated into the operations of many existing convenience stores, generating significant add-on sales, and is now being offered to all c-store franchisees. The company uses the same high quality pizza ingredients for its take 'n' bake product as with its standard pizza, with slight modification to portioning for increased home baking performance.
The company previously announced a grab-n-go service system for a limited portion of the Tuscano's Subs menu. The grab-n-go system was designed to add sales opportunities at existing non-traditional Noble Roman's Pizza and/or Tuscano's Subs locations. The grab-n-go system has been integrated into the operations of several existing locations, generating add-on sales. The system is now being made available to other existing franchisees for a small training and administrative fee.
The company is now offering new, non-traditional franchisees the opportunity to open with both take 'n' bake pizza and grab-n-go subs when they acquire a dual-brand franchise. Additionally, through changes in the menu, operating systems and equipment structure, the company is now able to offer dual Noble Roman's Pizza and Tuscano's Subs franchises at a significantly reduced investment cost. The company is now promoting these enhancements for non-traditional locations.
Finally, the company has recently submitted several bids to franchise Noble Roman's Pizza on various military bases. Most of those bids are still outstanding, though the company was just recently awarded contracts for the Keesler Air Force Base in Mississippi and Tinker Air Force base in Oklahoma. The company will be franchising these operations to independent franchisees pursuant to these contracts.
