Friday, October 24, 2003

Naperville, Again

Went to CB today and spent about 4 hours just hanging out, trying to get some conversations with Sally the owner and Chuck the regional CB consultant. Chuck was there this week to roll out the Quizno's style hot sandwiches that they were introducing. Brian and I tried a few of them out and they were very outstanding. Much better in my opinion than the Quizno's sandwiches I had before.

Found out a few more things from Sally today concerning finances:

The monthly costs were about $20,000 broken down as follows:

$5,000 lease
$5,000 salaries
$10,000 other

From previous conversations with her, she mentioned that she had a staff of about 12 people and she pays them only $6 a hour plus tips. Right now, they are grossing about $10,000 a month, so obviousy she has negative cash flow if her cost is $20,000/month. She also mentioned that about the 30% of the selling price goes to the cost of sales. Obviously some calculations probably need to be done to back into the actual cost of sales.

If her gross sales are $10,000, then at 30% cost of sales, it would be $3,000. This means that $7,000 must be going to expenses other than lease and salaries. She mentioned that this could include the electricity, water. I guess it could also mean insurance, royalties, etc. Peter and I probably have to figure this out a little further. Obviously, she may have been generalizing too much or double counting. However, the $20,000/month figure is what she probably thinks is her break-even point.

Also had some conversation with Chuck who used to be a franchisee and area manager for Quizno's before going to CB and looks like he had some very bad experiences with them which is why he ended up selling his franchises even though they were making good money. All in all, I would say this is making be much more leery of Q.

Lots more thinking and evaluating to do...

Mood| Accomplished


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