Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Franchise Index Falls 11.6 Percent as Financial Markets Spiral

03.06.2009
The Rosenberg Center Franchise 50 Index lost 11.6 percent of its value in the first quarter of 2009, pulled down by struggling financial markets.

“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 hachemi.aliouche@unh.edu.

Hachemi Aliouche | Newswise Science News
Further information:
http://www.unh.edu

More articles from Business and Finance:

nachricht Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

Im Focus: Three Magnetic States for Each Hole

Nanometer-scale magnetic perforated grids could create new possibilities for computing. Together with international colleagues, scientists from the Helmholtz Zentrum Dresden-Rossendorf (HZDR) have shown how a cobalt grid can be reliably programmed at room temperature. In addition they discovered that for every hole ("antidot") three magnetic states can be configured. The results have been published in the journal "Scientific Reports".

Physicist Dr. Rantej Bali from the HZDR, together with scientists from Singapore and Australia, designed a special grid structure in a thin layer of cobalt in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

Stingless bees have their nests protected by soldiers

24.02.2017 | Life Sciences

New risk factors for anxiety disorders

24.02.2017 | Life Sciences

MWC 2017: 5G Capital Berlin

24.02.2017 | Trade Fair News

VideoLinks
B2B-VideoLinks
More VideoLinks >>>