Noble Roman’s Last Gasp?

(FranchisePick.com)  In Noble Roman’s Last Gasp Effort to save its Franchise Michael Goode at Goode Value Investing writes:

I have previously criticized Noble Roman’s (OTC BB: NROM) for over-aggressively expanding and for management blaming its franchisees when those franchises failed. Noble Roman’s has now taken over six struggling Indianapolis-area stores from a franchisee in a bid to prove that its franchisees can operate profitably. This reeks of desperation, and it is also a repudiation of the company’s recent strategy of owning no stores. Also, Noble Roman’s did not file a form 8-k to announce the move, something that appears to be required giving the materiality of the takeover for Noble Roman’s shareholders. See Cory Schouten’s excellent article at the Indianapolis Business Journal for more details.

Noble Roman’s has also announced that it has retained an investment bank to seek ’strategic options’ including selling itself. The one problem with this strategy is that Noble Roman’s is likely not worth its current market cap of $29 million. I do not believe there is any chance of the company finding a buyer willing to pay more than $1 per share. The company’s profit fell 31% from Q4 2006 to Q4 2007 and I believe it likely that few of the area developers will actually build out new stores… READ ON

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