7-Eleven Takes Top Spot
In UNH Rosenberg Center Franchise 50 Index
In 2nd Quarter Of 2005
Battle of the Burgers Sees
Contact: Lori Wright
UNH Media Relations
Aug. 17, 2005
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™ Q2 2005 report. Udo Schlentrich
can be reached at 603-862-0137 or firstname.lastname@example.org.
Hachemi Aliouche can be reached at 603-387-5750 or email@example.com.
DURHAM – 7-Eleven, the world’s largest convenience
store, came out on top as the best performer in the second quarter
of 2005 in The Rosenberg Center Franchise 50 Index™, while
the battle of the burgers sees Wendy’s as the second-best
performer this quarter as McDonald’s tumbled to the third
The Rosenberg Center Franchise 50 Index™, developed by The
William Rosenberg International Center of 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.
The Franchise 50 Index™ more than made up its 0.1 percent
first-quarter 2005 drop as it gained 0.9 percent in the second quarter
2005, despite a tumble of 10.9 percent in market value of McDonald’s,
the largest component of the index. The S&P 500 Index was up
0.9 percent, while the Dow Jones Industrials Average was down 2.2
percent, and the Nasdaq surged 2.9 percent this quarter.
Of the 50 components comprising the RCF50 Index, 30 were up while
20 were down in the second quarter. 7-Eleven (SE) led the winners
with a 26 percent jump, followed by Wendy’s International
(WEN) (25.5 percent), and Aaron’s Rents Inc (RNT) (4.5 percent).
The biggest losers were Buffalo Wild Wings (BWLD) (-17.5 percent),
Spherion Corp (SFN) (-11.2 percent), and McDonald’s (MCD)
The stock price of 7-Eleven (SE), the world’s largest convenience
store, jumped 26 percent in the second quarter after reporting its
best financial results in more than a decade. “The company’s
higher profits, total sales and same-store sales were fueled by
strong gasoline sales, and new and improved coffee, sandwiches and
other offerings. Among its new offerings were a new flavor of its
signature icy treat Slurpee branded SpongeBob SquarePants, and Stir
Crazy, a frozen dessert. In June, 7-Eleven launched a month-long
celebration of the Slurpee’s 40th anniversary, with the introduction
of several new flavors and the awards of prizes and promotions,”
according to the report.
Wendy’s International (WEN), the third-largest hamburger
chain in the United States, was the second-best performer as its
share price rose 25.5 percent. “Wendy’s recovered from
a steep decline during the first quarter after a customer claimed
that she had found a human finger in a bowl of chili bought in
a San Jose, Calif. Wendy’s restaurant. The claim was found
to be a hoax and sales at Wendy’s started recovering. Wendy’s
tried to accelerate the recovery by launching a new marketing effort,
and by giving away Junior Frostys for free. In June, the share
price of Wendy’s jumped further and reached an all time-high
following speculation that some investors were planning a takeover
of the company,” according to the report.
McDonald’s (MCD), the largest component of the RCF 50 Index™ with
almost 20 percent of its market capitalization, was the third-worst
performer of the index, losing 10.9 percent of its market value.
According to the researchers, in June, McDonald’s reported
worldwide same-store sales growth of only 1.8 percent, significantly
lower than previous months’ results.
“Continued weakness in its European operations (1.4 percent
drop in same store sales), particularly in its two largest European
markets (Germany and the United Kingdom), was negatively received
by investors. This led the company to announce the replacement
of its McDonald’s Europe division. Despite this quarter’s
lackluster overall sales results, the fruit-and-walnut premium
salad launched by McDonald’s in April this year was a big
hit in the United States, helping to boost U.S. sales at stores
open longer than a year 4.2 percent in May,” the report said.
The RCF 50 Index™ is up 0.9 percent over the first half
of the year 2005. It is up 53.7 percent since January 2000, while
the S&P 500 is down 14.6 percent over the same period.
The full Rosenberg Center Franchise 50 Index second quarter report
for 2005 is available at http://www.unh.edu/news/docs/F50Q205.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