Franchises and Noble Roman's and Retail and Real Estate & Retail

Noble Roman's expanding grocery-product line

November 24, 2010

Indianapolis-based Noble Roman’s Inc. is strengthening its push into grocery stores with a new series of products that will hit shelves in the next few weeks.

The pizza franchisor will begin offering pasta sauce, Parmesan cheese, cheesy bread sticks, cheese dip and a deep-dish lasagna dish to grocery stores. Company officials say the new products will complement the Noble Roman’s take-n-bake pizzas that have been offered to grocery and convenience stores since late 2009.

Those pizzas have been a bright spot for the company as quarterly revenue from franchises has fallen this year in a tough economy.

But Noble Roman’s President Scott Mobley said Wednesday morning the grocery store push is not replacing the company’s strategy of opening restaurants offering hot pizza. Rather, he said it’s a natural outgrowth of Noble Roman’s strategy to locate in nontraditional venues such as zoos, convenience stores and bowling alleys—bringing the food to where people congregate

“The grocery store is basically another venue within that whole nontraditional concept,” Mobley said. “The opportunity was not in providing a hot product as much as providing a product that could be baked at home.”

Since the take-n-bake pizzas were launched in September 2009, the company has signed agreements with 413 grocery stores to sell the pizzas, according to its most recent earnings report.

The company expects to expand that presence, in part through agreements with two grocery-distribution companies that have promoted the products to their customers.

That growth has helped offset some of the losses in franchise revenue. Mobley said it’s been tough to get franchises off the ground this year as some places slated to house them, such as entertainment and game venues, have failed to open because they couldn’t get financing for the operations. Noble Roman’s reported a $528,527 loss in the quarter ended Sept. 30.

Mobley said the company has begun seeing a gradual a uptick in franchise revenue as more locations open, including one at Tinker Air Force Base in Oklahoma expected to open in the next 10 days.

But the grocery products could provide a more recession-proof form of revenue. Company executives expect items such as breadsticks and sauce could have more revenue-generating potential than the take-n-bake pizzas, which require stores to sign up because there is some employee training to assemble the products. The newer products do not require stores to sign agreements with Noble Roman’s.

Mobley said the chain has other grocery products, including additional baked pastas and sauces, in the pipeline. Those could be rolled out to stores in coming months.

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