“By March 9, 2009, financial markets, as proxied by the S&P 500 Index, had dropped a shocking 25.1 percent from the beginning of the year, wiping out almost 15 years of gains.
Most firms’ share prices, including the components of the Rosenberg Center Franchise 50 Index, lost a large amount of their market value,” said Hachemi Aliouche, associate director of the Rosenberg International Center of Franchising at the University of New Hampshire Whittemore School of Business and Economics.
“However, by the end of the first quarter, a number of positive developments helped start a recovery. These included stronger than expected home sales; positive reactions to the Treasury Department’s plan to clean up banks’ toxic assets; gains in new orders of durable goods; and narrowing of the trade deficit. By the end of the quarter, the RCF 50 Index lost ‘only’ 11.6 percent of its value, while the S&P 500 Index dropped ‘only’ 11.7 percent,” Aliouche said.
The Rosenberg Center Franchise 50 Index tracks a representative set of 50 US publicly traded companies engaged in business format franchising. The index is down 11.6 percent over the year, compared to a decline of 11.7 percent for the S&P 500. Since its inception in 2000, the index is up 27.1 percent, compared to a drop of 42.8 percent for the S&P 500 over the same period.
Twenty components of the index ended the first quarter of 2009 with positive market gains, including Ruby Tuesday (RT), the developer, operator and franchisor of casual dining restaurants, which was the best performer in the index, up 87.3 percent in the quarter.
According to Aliouche, Ruby Tuesday benefitted from the powerful market rally that started after March 9, 2009; analysts’ positive comments that restaurants in general would benefit from the stabilizing economy; and Ruby Tuesday’s successes in stemming traffic declines at its restaurants through aggressive promotions and more focused advertising.
The worst performer of the RCF 50 Index this quarter was Jackson Hewitt Tax Service (JTX), losing 67.1 percent of its market value.
“Higher unemployment and reduced tax collections as a result of the current recession have had a negative impact on JTX’ business, leading its management to lower their forecasts for tax returns prepared, revenues, and earnings for 2009,” Aliouche said. “Also, in order to conserve capital, enhance liquidity and strengthen its balance sheet, JTX suspended its dividend of $0.18 per share in order to save the company $20 million a year. These actions were negatively perceived by investors and they sold off JTX’ shares, driving its share price down.”
For more information on the Rosenberg International Center of Franchising or the RCF 50 Index, please visit the center’s Web site at http://franchising.unh.edu.
The University of New Hampshire, founded in 1866, is a world-class public research university with the feel of a New England liberal arts college. A land, sea and space-grant university, UNH is the state’s flagship public institution, enrolling 11,800 undergraduate and 2,400 graduate students.
Associate director Hachemi Aliouche is available to discuss the latest Rosenberg Center Franchise 50 Index analysis. He can be reached at 603-862-1884 or email@example.com.
Hachemi Aliouche | Newswise Science News
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Whispering gallery mode (WGM) resonators are used to make tiny micro-lasers, sensors, switches, routers and other devices. These tiny structures rely on a...
Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!
When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...
For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.
Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...
MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems Holding GmbH about commercial use of a multi-well tissue plate for automated and reliable tissue engineering & drug testing.
MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems...
Pathogenic bacteria are becoming resistant to common antibiotics to an ever increasing degree. One of the most difficult germs is Pseudomonas aeruginosa, a...
19.09.2017 | Event News
12.09.2017 | Event News
06.09.2017 | Event News
20.09.2017 | Life Sciences
20.09.2017 | Power and Electrical Engineering
20.09.2017 | Physics and Astronomy