I agree. I just don't think that the franchises are looking as good as they were a year or more ago. I went to Panera last weekend and the prices were $1+ more a meal than they were a year ago. Corn has tripled, wheat is 5 times what it was, cooking oil is up 30%+, everything that a franchise or any other restaurant has to buy has gone up a ton since last year. And there is no way that these eateries can pass the entire burden onto the customer or their meals will start costing $10+ a pop and no one is going to pay that for a sandwich.
That is what is really happening on the ground. There is a Quizno's near by that is closing. I live near one of the largest duck meat producing plants in the country and they're closing operations because they can't feed their ducks anymore and make a profit.
I even heard that ribeyes and other prime steak is selling for $5 a pound or less in Utah and the surrounding area because the beef farmers are having to slaughter all their herds because they can't afford to feed them anymore and they have to slaughter them before they get sick from malnutrition. Once the glut softens and the pinch spreads, you can bet that the recent rise in meat prices due to increased feed grain prices will be even worse simply due to the growing scarcity of meat.
A missed by-product of the ignorant policy of burning your food to fuel your cars. Combine that with the fact that you have to burn more ethanal to accelerate at the same rate as gasoline, and that ethanol HAS to be transported by tankers, NOT pipelines, and you burn a TON more desiel to transport it than gasoline because you can't use pipelines, etc, etc, etc. Another Prius-ish fiasco that does more harm to the environment than good and does NOTHING to reduce our dependence on oil...but that's another rant for another board, LOL! (Oh, and just for the record I'm not a tree-hugging have-to-impress-my-enviromental-hippie-friends-and-buy-a-prius-even-though-the-batteries-will-pollute-the-planet-for-a-thousand-years-but-I-can-act-like-I'm-doing-something-good-for-the-planet-and-pat-myself-on-the-back kinda person) Furthermore, now that they price of wheat has quintrupled, more farmers this year will go back to wheat so corn will go even higher.
For the first time in HISTORY last month, the United States IMPORTED wheat. To anyone that has been alive for more than 30 or 40 years, you realize how shocking that is.
To think the franchisees will swarm into the market in this kind of environment is foolish. Not only do I think that SPKLs overall business plan was flawed due to a over-estimation of per store revenue, but the current and foreseeable future commodities market would lead me to believe that it may be fatal.
Don't get me wrong, I like the company and their concept, it's a great idea, I just think that it was going to take MUCH longer than they and their pumper promotion websites thought (don't think they didn't have a hand in massaging the $$$ message to the shareholders and public), they panicked and got financing to finance operations and buy stores for some insane reason, and now with the recent commodity crisis, it may be fataly flawed.
I guess we'll see. Bottom line is they need to open stores, fast, and I don't see many being built at the moment.
P.S. Franchise agreements are not promises to build.
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