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BABB - Bab, Inc


Guest Schwab711
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Bab Inc is a franchiser of muffin and bagel stores. They have 98 franchise and 6 licensed stores and earn about $1.6m annually in royalties and they are literally breaking even with their current franchise total. They also pay a $0.04 annual dividend (quarterly) for an ~6.67% yield, although this is currently just a return on capital (not taxed; you need to evaluate your own situation when it comes to taxes however).

 

This idea rests solely on whether or not they have a positive net add of franchise locations over the next 3-5 years. They really need ~150 locations (50% increase) to really turn into an excellent investment. Well above 150 will make this a home run. I personally don't plan to invest but I'm interested in what folks think. They just dropped 12% today on no news and they are currently at 52 week (and 2 year+) lows at $0.61. Realistically I probably wouldn't be interested at nearly any feasible price because I don't like their prospects. Has anyone eaten at one of their stores?

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I have a tiny bit of personal experience with a BAB franchise.  It did not seem particularly well run and has since closed.  This was something like six years ago and I have no more current information on the parent company situation, so take it for what it's worth (i.e., probably not very much).

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  • 1 year later...

This is a super old thread... But if anyone holds this company, I would be interested in chatting.  Please send a PM.

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This is a super old thread... But if anyone holds this company, I would be interested in chatting.  Please send a PM.

 

I'm intrigued. Doesn't really look the business has gone anywhere though. Let's discuss here

 

"At February 29, 2016, the Company had 84 franchise units and 3 licensed units in operation in 24 states and one international

location. There are 7 units under development. "

 

"At February 28, 2014, the Company had 95 franchise units and 5 licensed units in operation in

26 states."

 

JCP Investment partners has done well and i've noticed there stake is quite big at ~5%. Some small insider purchases as well.

 

 

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This is a super old thread... But if anyone holds this company, I would be interested in chatting.  Please send a PM.

 

I'm intrigued. Doesn't really look the business has gone anywhere though. Let's discuss here

 

"At February 29, 2016, the Company had 84 franchise units and 3 licensed units in operation in 24 states and one international

location. There are 7 units under development. "

 

"At February 28, 2014, the Company had 95 franchise units and 5 licensed units in operation in

26 states."

 

JCP Investment partners has done well and i've noticed there stake is quite big at ~5%. Some small insider purchases as well.

 

They are trading below replacement cost, in my view. That doesn't necessarily mean the assets would be worth replacing! I don't know too much about management and I don't think they've done a terrible job, but they could be run better (any store-specific DD will confirm). They have a lot of low-hanging operational efficiency opportunities. Someone could get a sufficient return just from those. BABB is a nice (and mispriced) lottery ticket, especially for someone with sufficient industry experience. This is a lot less interesting for small, passive investors.

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