Franchisor Marketing

SOURCE:
Cosi, Inc. Reports Second Quarter Sales
DEERFIELD, IL, Jul 17, 2008 (MARKET WIRE via COMTEX) — Cosi, Inc. (COSI:

Highlights:
COSI 2.57, +0.40, +18.4%) , the premium convenience restaurant company, today reported that total revenues for the 2008 second quarter grew 3.6% to $36,722,800 from $35,448,100 in the 2007 second quarter. Company-owned net restaurant revenues, excluding discontinued operations, grew 3.3% in the quarter to $36,207,000, compared to $35,043,300 in the previous year’s quarter. Franchise fees and royalty revenues for the quarter contributed $515,800, compared to $404,800 in the 2007 second quarter.
System-wide comparable restaurant sales for the 2008 second quarter as measured for restaurants in operation for more than 15 months recorded an aggregate 2.2% increase compared to the second quarter of 2007. The breakdown in comparable sales between Company-owned and franchise-operated restaurants are as follows:

For the 13 weeks ended
June 30, 2008
————-
Company-owned 2.3%
Franchise-operated 1.5%
Total System 2.2%

“We are encouraged by the increase in total revenues and the continued positive trends in system-wide comparable sales given the current challenging consumer environment,” said James Hyatt, President and Chief Executive Officer. “Our efforts remain focused on working with our franchise partners to drive development and revenue growth, execute more effectively across our system to enhance operating margins and continue improving the guests’ experience.”
Company-owned comparable sales are based on sales from restaurants that have been open more than 15 months. Franchise-operated comparable sales are based on sales, as reported by franchisees, from restaurants that have been open more than 15 months.

Franchise-operated and system-wide comparable restaurant sales percentages are non-GAAP measures, which should not be considered in isolation of or as a substitute for other measures of performance prepared in accordance with GAAP and may not be comparable to system-wide sales as defined or used by other companies. Cosi does not record franchise-operated sales as revenues. However, Cosi’s royalty revenues are calculated based on a percentage of franchise-operated restaurant sales. Management believes franchise-operated and system-wide comparable sales information is useful in assessing consumer acceptance of the Company’s brand, facilitates an understanding of financial performance and overall sales trends, helps the Company understand the effectiveness of marketing initiatives, the cost of which our franchisees contribute to based on a percentage of their sales, and provides information that is relevant for comparison within the industry.

About Cosi, Inc.
Cosi ( http://www.getcosi.com) is a national premium convenience restaurant chain that has developed featured foods built around a secret, generations-old recipe for crackly crust flatbread. This artisan bread is freshly baked in front of customers throughout the day in open flame stone hearth ovens prominently located in each of the restaurants. Cosi’s warm and urbane atmosphere is geared towards its sophisticated, upscale, urban and suburban guests. There are currently 102 Company-owned and 43 franchise restaurants operating in eighteen states, the District of Columbia and the United Arab Emirates. The Cosi vision is to become America’s favorite premium convenience restaurant by providing customers authentic, innovative, savory food while remaining an affordable luxury.
The Cosi menu features Cosi sandwiches, freshly tossed salads, melts, soups, Cosi bagels, flatbread pizzas, S’mores, snacks and other desserts, and a wide range of coffee and coffee-based drinks and other specialty beverages. Cosi restaurants are designed to be welcoming and comfortable with an eclectic environment. Cosi’s sights, sounds, and spaces create a tasteful, relaxed ambience that provides a fresh and new dining experience. “