Franchise Services of North America Inc. (FSNA) announced its third quarter results for the period, which ended June 30, 2009. Revenue and the net loss for the three months ended June 30, 2009 were $3.7 million and $110,384, respectively, as compared to revenue of $3.7 million and a net loss of $15,576 for the third quarter ended June 30, 2008.
The company also announced the sale of the Wallaceburg, Ontario franchise under the Rent-A-Wreck brand. The sale of this new franchise was completed during the company's fourth quarter and the financial impact of this new location is not reflected in the results for the period ending June 30, 2009.
Bob Barton, the company's chief operating officer, stated, "The third quarter was a challenging operating period for us. We continue to obtain new prospects and are negotiating with qualified candidates for the purchase of franchises; however, the credit markets have restricted these candidates from obtaining fleet financing and thus the ability to execute Franchise Agreements.
“During the quarter, the company also experienced an unusually high level of claims for vehicles insured under the company's insurance programs. Additionally, our reserves for outstanding claims under the company's insurance programs increased by $91,000 in the quarter, as compared to a reduction in the reserves of $232,000 for the comparative period ending June 30, 2008. A number of factors, including weather-related/seasonality factors, can affect claims experience. The results of any one period, positive or negative, are not necessarily representative of the experience the company may have in subsequent periods.
“We are also quite pleased to announce the sale of the Wallaceburg franchise. This represents the fifth franchise sold this year by our Canadian division which is showing strong growth in the marketplace."