TSX-V Trading Symbol: FSN
CALGARY, Aug. 28 /CNW/ - Franchise Services of North America Inc. ("FSNA"
or the "Company") announced today that it has filed its Q3 report, and the
corresponding Management's Discussion and Analysis, for the period ending June
30, 2008. The reports may be found on the Company's website
(www.fsna-inc.com), as well as on SEDAR (www.sedar.com).
For the three months ended June 30, 2008, the Company reported a net loss
of $15,567 as compared to net income of $235,011 for the period ending
June 30, 2007. Included in the quarterly loss was approximately $100,000 of
one-time legal and accounting expenses associated with the Cease Trade Order.
Total revenue for the three-month period ending June 30, 2008 was $3,745,377
as compared to $4,110,665 for the period ended June 30, 2007. The Company was
unable to generate any franchise sales revenue during the period as a result
of the Cease Trade Order, and the inability of the Company to file a current
Offering Circular until the issues regarding the Cease Trade Order were
For the nine-month period ended June 30, 2008, net income was $258,071 as
compared to $165,173 for the ten month period ended June 30, 2007. Revenues
were $11,850,078 for the nine months ended June 30, 2008, as compared to
$14,508,585 for the ten month period ended June 30, 2007.
FSNA also announced today the sale of its second operating rental
location under its Canadian Master Franchise Agreement for the U-Save brand in
South Etobicoke, Canada.
Bob Barton, the Company's Chief Operating Officer, stated, "This was a
very difficult quarter for us. The Cease Trade Order ("CTO") that was in
effect and the resulting incremental legal and accounting costs were both
significant and time consuming. Additionally, as a result of the CTO, there
was a delay in the filing of the Company's Offering Circular for the U-Save
brand. It was not effective during the quarter, preventing the sale of any
domestic franchises. The Company filed its Offering Circular following
resolution of the Cease Trade Order and has begun the process of selling.
Overall, excluding the incremental legal and accounting costs, the Company
performed well during the quarter in what can be described as challenging
economic conditions for the car rental industry.
We are also pleased with the progress of the Canadian Master Franchisee
in opening their second location under their agreement and expanding the
U-Save brand in Canada. This location will actually be operated by the Master
Franchisee himself, confirming his commitment to the development of the
FSNA is a publicly traded company listed on the TSX Venture Exchange. The
Company and its subsidiaries own the following brands: U-Save Car & Truck
Rental, U-Save Car Sales, Rent-A-Wreck of Canada, Auto Rental Resource Center
("ARRC"), Xpress Rent A Car and Peakstone Financial Services.
U-Save, together with its subsidiary ARRC, has over 1,100 locations
throughout the United States and is one of North America's largest franchise
car rental companies. Having primarily serviced the local market for the past
25 years, the Company is expanding into the airport market with plans for the
opening of airport locations in the top 30 markets in the United States and
the major airports in Canada. U-Save currently services 28 airport markets in
14 different states. U-Save Car Sales is an expansion of the U-Save brand into
the car sales market, and provides goods and services to car sales operators
looking to affiliate with a national brand.
Practicar Systems Inc. (a wholly owned subsidiary of FSNA) owns the
rights to the Rent-A-Wreck(R) trademark for all of Canada. The Rent-A-Wreck(R)
system operates a network of 53 franchises from coast-to-coast in Canada,
providing a range of vehicle rental, leasing and sales options to its
customers. The Rent-A-Wreck(R) system has been in continuous operation in
Canada since 1976.
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release.
For further information:
For further information: on FSNA or any of its operating subsidiaries
please contact: Alison Tullis, CHF Investor Relations, (416) 868-1079 x 233,
Alison@chfir.com; Robert M. Barton, Chief Operating Officer, FSNA, (601)
713-4333 x 116, firstname.lastname@example.org