UNH Rosenberg Center Franchise
50 Index Beats Major Indices In Q3
CEC Entertainment Soars While Krispy
Kreme Hits 52-Week Low
Contact: Lori Wright
UNH Media Relations
Nov. 18, 2004
DURHAM, N.H. – Despite a very challenging environment that
drove most of the major indices down, the Rosenberg Center Franchise
50 Index was up 0.4 percent in the third quarter of 2004.
The Rosenberg Center Franchise 50 Index, developed by The William
Rosenberg International Center for Franchising at the University
of New Hampshire Whittemore School of Business and Economics, is
an index that tracks the market performance of the top 50 U.S. public
franchisors. These 50 franchisors represent more than 98 percent
of the market capitalization of all U.S. public companies engaged
in business format franchising.
During the same period that the Rosenberg Center Franchise 50 rose,
the S&P 500 dropped 2.3 percent, the Dow Jones slipped 3.4 percent,
and Nasdaq dipped 7.4 percent. Since January 2000, the Rosenberg
Center Franchise 50 has increased 34.5 percent, compared to a drop
of 20.1 percent in the S&P 500 over the same period.
CEC Entertainment Inc., the operator and franchisor of Chuck E.
Cheese restaurants and entertainment centers, was the strongest
performer of the index this quarter. Better than expected financial
results generated by new store openings and increased same-store
sales, and a bullish business outlook drove up its stock price 24.5
percent this quarter.
Once again, Krispy Kreme was one of the biggest losers of the index,
dropping 33.7 percent of its market value this quarter following
a string of bad news. The popularity of the low carbohydrate diet,
the resignation of its chief operating officer, a Securities and
Exchange Commission probe, and a 55 percent decline in its quarterly
earnings pushed its stock price to a 52-week low. Its stock price,
which started the year at $36.65, dropped to $12.66 by Sept. 30,
2004, a 65.5 percent drop.
McDonald’s, the RCF 50 Index’ largest component, continued
to perform well, increasing 7.8 percent this quarter. It announced
strong financial results for the preceding quarter (27 percent increase
in earnings per share versus the same quarter a year ago). It reported
its 16th straight month of worldwide same-store growth despite a
drop in Europe. It also announced in September a 38 percent increase
in its annual dividend. McDonald’s continued success is attributed
to improved service, new marketing programs, and expanded menu selections
(including the launch of the premium Chicken Selects).
The full Rosenberg Center Franchise 50 Index third quarter report
is available at http://www.unh.edu/news/docs/F50Q304.pdf.
For more information on the William Rosenberg International Center
of Franchising or the Rosenberg Center Franchise 50 Index, please
visit the Center’s web site at http://franchising.unh.edu.
Editors: Director Udo Schlentrich and senior research fellow Hachemi
Aliouche of The William Rosenberg International Center of Franchising
at the University of New Hampshire, is available to discuss the
Franchise 50 Index™ Q3 report. Udo Schlentrich can be reached
at 603-862-0137 or firstname.lastname@example.org.
Hachemi Aliouche can be reached at 603-862-6455 or email@example.com.