A sluggish economy and stiffer enforcement of franchise agreements resulted in second-quarter profit plunging 44 percent for Noble Roman’s Inc., the Indianapolis restaurant chain announced late yesterday.
Noble Roman’s generated $395,307 in net income compared with $703,506 a year earlier.
Revenue dived to $2.4 million, from $3.1 million.
The company attributed most of the weaker results to slower growth in its co-branded franchises, which include Noble Roman’s Pizza and Tuscano’s Italian Style Subs.
Noble Roman’s earlier laid down more rigorous standards in order to gain greater consistency among its restaurants. Closer screening of franchisees along with better training and demands that franchisees be more involved with construction and marketing all have slowed growth, the company said.
However, the company reiterated that it is confident that the standards ultimately will result in a stronger base from which to grow.
Further weakening results were higher oil prices and tight credit markets, Noble Roman’s said.
Noble Roman’s shares fell a penny, to 75 cents, in morning trading.