Nathan's Famous signs retail, restaurant agreement for Costa Rica

Feb. 7, 2014

Nathan's Famous Inc. this week reported results for the third quarter of its 2014 fiscal year that ended Dec. 29.

For the fiscal quarter:

  • Net income increased by 4.2 percent, to $1,107,000 as compared to $1,062,000 for the 13 weeks ended Dec. 23, 2012;
  • Revenues increased by 23.3 percent, to $18,533,000, as compared to $15,025,000 during the prior year.

For the 39 weeks ended Dec. 29:

  • Net income increased by 20.2 percent, to $7,109,000 as compared to $5,913,000 for the prior year.
  • Revenues increased by 16.0 percent, to $65,596,000, as compared to $56,567,000 during the prior year.

The company also reported the following:

  • In March 2014, Nathan's new license agreement will commence with John Morrell & Co. replacing SMG, Inc. as Nathan's exclusive licensee to manufacture and sell branded hot dog, sausage and corned beef products at retail locations. The company said in a press release that the financial terms of the John Morrell agreement are more advantageous compared to the financial terms of the current SMG agreement. These improved terms include royalties of 10.8 percent of net sales, compared to approximately 4.5 percent of net sales under the SMG agreement, and significant minimum annual royalty guarantees. Under the John Morrell Agreement, the minimum guarantee for the first year is $10 Million, and the company said the actual royalties should exceed the minimum. Royalties earned under the SMG agreement over the last 12 months were $5,346,000.
  • License royalties pursuant to all license agreements were $6,242,000 during the 39 weeks ended Dec. 29, 2013, as compared to $6,104,000 during the 39 weeks ended Dec. 23, 2012.
  • Sales from the Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, increased by 20.3 percent to $40,256,000 during the fiscal year. Currently, products are being distributed throughout all 50 states in channels to include convenience stores, travel centers, entertainment venues, colleges and universities and vending.
  • Nathan's executed a Master Development Agreement for the development of Nathan's restaurants and retail distribution throughout Costa Rica.
  • In October, 2013, Nathan's was ranked No. 55 on the Forbes list of the Best Small Companies in America and was listed as the Best Small Company in New York State.

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Topics: Franchising & Growth , Operations Management

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