I may be making mistakes... but it seem to me, fom looking at their AR, that they have no free cash flow for fiscal years 2002, 2001, and 2000. Wouldn't franchising the O'Charley's concept help? It would give them some cash from operations (and also customers for what their O'Charley's commissary sells) and it wouldn't involve any new capital expenditures.

They've been talking about franchising for some time now it seems, but they haven't actually done it. Page 13 says they will start doing it this year--but they warn that it could have an adverse effect on operating results, at least early on... I can see that they will have some costs--they mention legal and administrative costs--but isn't the franchising method basically one by which money flows to them for the use of their concept? The franchisees bear the risk.

--SirTas