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from http://finance.lycos.com/qc/news/story.aspx?story=35725749

Applebee's (NASDAQ:APPB) considers itself to be the largest "casual dining concept" in America, (not to be confused with fast food), both in terms of number of restaurants and market share. You want to be really good if you are going to go head-to-head with these folks. This summer, shares of O'Charley's (NASDAQ:CHUX), which competes with APPB, were cut in half after the restaurant operator reported a drop in same-restaurant sales. For the 26 weeks ended in June, revenues rose 21% to $488.9 million and net income rose 7% to $44.8 million.

Cut in half??!! Well, the price dropped significantly. (And it's dropping significantly today too.)

--SirTas
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As I recall, the stock dropped "only" 20-30% the day in August when quarterly results were released.

Looks like CHUX is close to signing up its first franchisee, Meritage Hospitality Group (MHG). The deal is subject to MHG getting financing. MHG is a Wendy's franchisee and would have exclusive rights to develop stores in Michigan.

Perhaps this will become the growth strategy going forward--use franchises in new markets like Michigan and stay with company-owned stores in CHUX's existing markets? Who knows.

http://biz.yahoo.com/prnews/030910/dew020_1.html
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