This past weekend, I enjoyed a BBQ combo dinner at Famous Dave's (NASDAQ:DAVE) consisting of barbecued pork and chicken, corn on the cob, fries, Wilbur beans, and corn bread. After six visits to Famous Dave's, I still can't get enough of the sizzlin' sauces.
And even though the concept is Midwestern -- Famous Dave's is based in Minnesota -- BBQ lovers in New England will now get their chance to savor the flavor.
In a recent announcement, New England Barbecue Ventures said it will be opening nine Famous Dave's franchises in Connecticut, Maine, Massachusetts, and Vermont. With 117 units currently under operation (38 company-owned and 79 franchised) and an additional 172 signed development agreements, Famous Dave's is showing that it's ready to aggressively expand, and this latest announcement is only further evidence.
The partnership seems like a great idea: Combine New England Barbecue Ventures' expertise in the Northeast with Famous Dave's award-winning grub. But consider that in Dave's latest quarterly results, the company-owned units performed better than the franchises did. Same-store sales from its franchised units declined 1.9%, while company-owned units actually managed to increase same-store sales by 1.1%. It makes you wonder whether Dave's would be better off going on its own. And with its recent balance sheet showing only $7 million in cash and cash equivalents, it appears that any substantial company-owned unit additions will likely have to come by way of additional debt.
With the addition of these franchised units, shareholders should be looking to see whether Famous Dave's has a recipe for improving comps within these units.
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.
