Wendy's franchisee DavCo's profits up 20%

Nation's Restaurant News, Nov 27, 1995

CROFTON, Md. - Wendy's franchisee DavCo Restaurants Inc. has posted a 20-percent increase in profits for its 1995 fiscal year with a net income of $8.42 million, up from $7.03 million in the previous year. Revenue rose 28 percent, to $208.67 million, from S163.36 million.

In its fourth quarter ended Sept. 30.. net income increased 5 percent, to $2.44 million, from $2.32 million in the year-ago quarter. Sales were up 21 percent, to $52.94 million, from $43.66 million.

The company attributed its sales and profit improvements to the opening of nine new units plus the acquisition of another Wendy Is franchisee, Southern Hospitality Corp., in Nashville, Tenn., on Sept. 24, 1994.

However, DavCo's same-store sales. compared with performances in 1994. were down 0.8 percent nationwide for fiscal 1995. The company said it did see same-store sales improvements in some areas of the country during the year with its Southern market up 2.6 percent and the Midwest up 1.2 percent. The Mid-Atlantic was down 2.2 percent.

In the fourth-quarter same-store sales, were down 2.4 percent from the year-ago quarter. DavCo pointed out that was an improvement from the third quarter of fiscal 1995 when same-store sales had decreased 3.2 percent.

DavCo chairman and chief executive Ronald D. Kirstien said the company had maintaind "fair prices" during fiscal 1995, which he characterized as "a year of continued price cutting by our major competitors."

The company is the largest franchisee of Wendy's International Inc., with 215 units in Washington, Maryland, Virginia, Ohio and Illinois. DavCo said it plans to open 15 to 20 new units in fiscal 1996.