Einstein Bros 2007 Annual Report Download - page 12

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http://www.sec.gov/Archives/edgar/data/949373/000104746908002111/a2183061z10-k.htm[9/11/2014 10:12:02 AM]
Management Information Systems
Each Einstein Bros. and Noah's company-owned restaurant uses point-of-sale computers designed specifically for the fast-casual restaurant
industry. The system provides a touch screen interface, a graphical order confirmation display, and integrated high-speed credit card and gift card
processing. The point-of-sale system is used to collect daily transaction data, which is used to generate information about daily sales, product mix
and average check. All products sold and prices are programmed into the system from our corporate office.
During 2007 we installed an improved ordering system in 111 of our higher volume restaurants where we believe waiting time has been a
limiting factor to increasing sales. This system uses wireless technology to reduce the time our guests wait in line before they receive their food.
This system, which utilizes both a tablet PC as well as a traditional ordering station, allows our associates to create a second ordering station for
our guests. The system tracks the time from when the order is taken to completion and alerts our associates to orders that have exceeded our
acceptable completion time. Additionally, we believe that this system provides for a higher level of production accuracy than our current paper
tickets and helps to reduce waste. In addition, we deployed the latest generation of payment technologies, contact-less payment credit card readers,
to all Einstein Bros and Noah's company-owned restaurants. This adds to our speed of service by allowing customers with contact-less credit and
debit cards to make payments quickly and securely by just tapping their card on the contact-less payment reader.
Our in-restaurant back office computer system is designed to assist in the management of our restaurants. The back office restaurant
management application provides labor and food cost management tools. These tools provide corporate and retail operations management quick
access to detailed business data and reduces restaurant managers' administrative time. The system provides our restaurant managers the ability to
submit orders electronically with our distribution network. The system also supplies sales, bank deposit and variance data to our accounting
department on a daily basis. We use this data to generate daily sales information and weekly consolidated reports regarding sales and other key
measures, as well as preliminary weekly detailed profit and loss statements for each location with final reports following the end of each fiscal
period.
Trademarks and Service Marks
Our rights in our trademarks and service marks are a significant part of our business. We are the owners of the federal registration rights to the
"Einstein Bros.," "Noah's New York Bagels" and "Manhattan Bagel" marks, as well as several related word marks and word and design marks
related to our core brands. We license the rights to use certain trademarks we own or license to our franchisees and licensees in connection with
their operations. Many of our core brand trademarks are also registered in numerous foreign countries. We are party to a co-existence agreement
with the Hebrew
13
University of Jerusalem ("HUJ") which sets forth the terms under which we can use the name Einstein Bros. and the terms under which HUJ could
use the name and likenesses associated with the Estate of Albert Einstein. We also own numerous other trademarks and service marks related to
our other business. We are aware of a number of companies that use various combinations of words in our marks, some of which may have senior
rights to ours for such use, but we do not consider any of these uses, either individually or in the aggregate, to materially impair the use of our
marks. It is our policy to defend our marks and their associated goodwill against encroachment by others.
Seasonality and Quarterly Results
Our business is subject to seasonal fluctuations. Significant portions of our net revenues and results of operations are realized during the fourth
quarter of the fiscal year, which includes the December holiday season. Because of the seasonality of the business and the industry, results for any
quarter are not necessarily indicative of the results that may be achieved for any other quarter or the full fiscal year.
Consumer Spending Habits
Our results depend on consumer spending, which is influenced by consumer confidence and disposable income. In particular, the effects of
higher energy and food costs, an increase in minimum balances payable on consumer debt and increasing interest rates, among other things, may
impact discretionary consumer spending in restaurants. Accordingly, we believe we experience declines in comparable store sales during economic
downturns or during periods of economic uncertainty. Any material decline in the amount of discretionary spending could have a material adverse
effect on our sales and income.
Impact of Agricultural Commodities