- Company also signs Letter of Intent for Sale of Atlanta-Hartsfield
International Airport and an Affiliate Agreement for four airports in
TSX-V Trading Symbol: FSN
CALGARY, May 28 /CNW/ - Franchise Services of North America Inc. ("FSNA"
or the "Company") announced today its second quarter results for the period
ended March 31, 2009. Revenue and the net loss for the three months ended
March 31, 2009 were $3.4 million and ($212,901), respectively, as compared to
Revenue of $3.9 million and the net loss of ($5,715) for the second quarter
ended March 31, 2008. The comparative period, ending March 31, 2008, included
the sale of a Master Franchise for the Country of Mexico for $200,000.
The Company also announced the sale of the Brooks, Alberta franchise
under the Rent-A-Wreck brand, the sale of the Ft. Lauderdale, Florida U-Save
franchise to an existing affiliate, a sub-franchise for Sheppard, Ontario, the
receipt of a letter of intent for a U-Save franchise for the
Atlanta-Hartsfield International Airport, and the entering of an Affiliate
Agreement for the Country of Greece that has resulted in the U-Save brand now
being represented in the Athens, Rhodes, Santorini, and Crete airports. These
new franchise locations, the letter of intent for Atlanta, and the affiliate
location agreements all transpired during the Company's fiscal third quarter
and the financial impact of these new locations are not reflected in the
results for the period ending March 31, 2009.
Bob Barton, the Company's Chief Operating Officer, stated, "The second
quarter was a challenging operating period for us under difficult economic
conditions. We continue to obtain and negotiate with qualified candidates for
the purchase of U-Save and Rent-A-Wreck Franchises. The comparative 2008
quarter ending March 31 included the sale of the Master Franchise for Mexico
for $200,000. The Ft. Lauderdale franchise and the Greece Affiliate Agreements
were completed after March 31, 2009, and were with companies already operating
in the rental car marketplace. The letter of intent for Atlanta is also with
an operator already in the rental business.
During the quarter ended March 31, 2009 the Company also incurred higher
claims experience for vehicles covered under the Company's various insurance
programs. Claims experience can be affected by a number of factors, including
weather-related/seasonality factors. The results of any one period, positive
or negative, are not necessarily representative of the experience the Company
may have in subsequent periods.
The general economic conditions currently being experienced in North
America, and the related downward trend in tourism and enplanements, while
affecting overall car rental activity, has not had a material effect on the
Company's royalty revenue stream in the quarter as a significant number of the
franchisees do not operate in the airport market and are not directly impacted
by these trends."
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 leisure markets in the United
States and the major airports in Canada. U-Save currently services 31 airport
markets in 16 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.
Certain statements made in this news release are forward looking
including the paragraph wherein the Company has provided an update on certain
regulatory matters. The words "may," "could," "should," "would," "expect,"
"intend," "estimate," "anticipate," "believe," or "outlook" and similar
expressions often identify forward-looking information. By their nature,
forward-looking statements require FSNA to make assumptions and are subject to
inherent risks and uncertainties. There is significant risk that predictions,
forecasts, conclusions and projections will not prove to be accurate, that
FSNA's assumptions may not be correct and that actual results may differ
materially from such predictions, forecasts, conclusions or projections.
FSNA's forward-looking statements are qualified in their entirety by these
cautionary statements. In addition, the forward-looking statements are made
only as of the date of this news release, and except as required by applicable
law, FSNA undertakes no obligation to publicly update these forward-looking
statements to reflect new information, subsequent events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: on FSNA or any of its operating subsidiaries
please contact: Robert M. Barton, Chief Operating Officer, FSNA, (601)
713-4333 x 116, firstname.lastname@example.org