Schlotzsky's gourmet deli franchise store#

^#While some of the numbers included in the case information were extracted directly from the Schlotzsky's website in February 2002, the data presented in the case and the analysis provided in the teaching notes are intended for classroom discussion only and should not be used as the basis for making an actual Schlotzsky's franchise investment decision. The information contained within this case study was not compiled with the assistance of Schlotzsky's, Inc., nor has it been verified by Schlotzsky's, Inc. Nothing contained herein shall be considered an offer or sale of a Schlotzsky's franchise.

Abstract

This instructional case examines quantitative and qualitative information in the decision to acquire a franchise store of a Gourmet Deli chain. In particular, it illustrates to students how commonly requested quantitative information in practice, such as an income statement, needs to be tailored to the decision-making context. The case integrates and tests students' introductory understanding of income statements for managerial purposes, cost behaviour, break-even calculations, cost-benefit analysis, regression applications in management accounting, and corporate overhead cost allocations.

^#While some of the numbers included in the case information were extracted directly from the Schlotzsky's website in February 2002, the data presented in the case and the analysis provided in the teaching notes are intended for classroom discussion only and should not be used as the basis for making an actual Schlotzsky's franchise investment decision. The information contained within this case study was not compiled with the assistance of Schlotzsky's, Inc., nor has it been verified by Schlotzsky's, Inc. Nothing contained herein shall be considered an offer or sale of a Schlotzsky's franchise.

Keywords:

• cost behaviour
• cost allocation
• break-even
• cost-benefit analysis

Notes

^#While some of the numbers included in the case information were extracted directly from the Schlotzsky's website in February 2002, the data presented in the case and the analysis provided in the teaching notes are intended for classroom discussion only and should not be used as the basis for making an actual Schlotzsky's franchise investment decision. The information contained within this case study was not compiled with the assistance of Schlotzsky's, Inc., nor has it been verified by Schlotzsky's, Inc. Nothing contained herein shall be considered an offer or sale of a Schlotzsky's franchise.

¹See: http://www.schlotzskys.com/for further information. The company is also listed on the New York Stock Exchange with the ticker symbol: BUNZ.

²Source (as at 20 February 2002): http://www.schlotzskys.com/franchising.html. The company has since required that potential franchisees complete a questionnaire to obtain further franchising details.

³Source (as at 20 February 2002): http://www.kiomag.com/schlotzskys

Exhibit 1. Extract from Schlotzsky's Inc. 2001 Annual Report. Reprinted with permission.

⁴Source (as at 20 February 2002): http://www.wsrn.com/apps/news/art.xpl?id=3360531&f=NEWS&s=BUNZ

⁵Source (as at 20 February 2002); http://www.kiomag.com/schlotzskys

⁶Incremental sales decline if a third desktop is added to the capacity of the ‘cyber deli’ because the store starts to become congested, which on a relative basis, can harm repeat business.