bankruptcy, page-15

This is a fixed cost business. ie sign up new franchisees and service them going forward. Therefore the business model is highly leveraged to the number of franchisees. I would consider the business to be turning around when franchisee numbers stop falling and we see a few quarters of increases. This would show mum and dad franchisees trust RFG with there hard earned, believe in the business model and can see increased brand value. At this point in time RFG are simply cutting costs due to the leverage to franchisee numbers (falling). No changes to business model or profit sharing model with franchisees yet. Problem is it may take another 1 to 2 years before all the disgruntled franchisees leave and you start to see new ones come in and lift the overall number. I think people are kidding themselves if they think this is a 12 month turn around story. It has already been on going for 18 months plus now....