Earlier this week, we were discussing the role food franchises might play in spurring on the national economic recovery. Well, there’s more good news for those charting the state of the QSR sector as NexCen, a big franchisor, has announced that it has moved on from its recent financial problems.
NexCen, who own the likes of Great American Cookies, Maggie Moo's Ice Cream & Treatery, Marble Slab Treatery, Pretzel Time and Pretzelmaker, has literally returned from the brink. After a disastrous 2008, where the franchisor lost $38million in one quarter, NexCen, thanks to the guidance of CFO Kenneth Hall, has clawed its way back.
"I think we've proven operationally we're back on track," Hall told QSR Web, and added that the company had improved its income at “an adjusted basis 175 percent over the prior year.”
NexCen have been trying to evolve the multi-brand franchise model that companies like Yum! Brands have patented. Readers of this blog will be interested to see that international franchising has helped sparked the revival of NexCen.
That diversity is especially helpful in international franchising, where the company has been focused since U.S. franchise lending has all but dried up. Country developers who sign master franchise agreements for one brand welcome the opportunity to develop additional NexCen concepts as well, Hall said.
You’ll now find NexCen franchises in 22 different countries. While it’s a bit early to declare the financial crises of the past 24 months over forever, NexCen provide proof that a franchise model that’s run with cost-efficiency in mind can right itself.
"I like to think the turnaround is complete given our four consecutive quarters of operating income and positive cash flow," Hall said. "As it relates to the legacy debt and how we address that, it's an immediate priority of ours for this year. And it's something that we hope to resolve in the coming months."