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Salways some interssting tidbits here…

JMBA: All emphasis mine…

Q2 2010 10Q

Advertising Fund—
The Company participates with its franchisees in an advertising fund, established in fiscal 2010, to collect and administer funds contributed for use in advertising and promotional programs which are designed to increase sales and enhance the reputation of the Company and its franchise owners. Contributions to the advertising fund are required for Company Stores and traditional Franchise Stores and are generally based on a percent of store sales. The Company has control of the advertising fund. The fund is consolidated and the Company reports all assets and liabilities of the fund that it consolidates.

The advertising fund assets, consisting primarily of cash received from the Company and franchisees and accounts receivable from franchisees, can only be used for selected purposes and are considered restricted. The advertising fund liabilities represent the corresponding obligation arising from the receipts of the marketing program. In accordance with ASC Topic 952-605-25, the receipts from the franchisees are recorded as a liability against which specified advertising costs are charged. The Company does not reflect franchisee contributions to the fund in its Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows. Advertising fund assets as of July 13, 2010 include cash of $0.9 million, which is recorded in restricted cash, and $0.6 million of receivables from franchisees, which is recorded in accounts receivable on the consolidated balance sheet. Advertising fund liabilities as of July 13, 2010 of $1.6 million are reported in other accrued expenses and accounts payable on the consolidated balance sheet. There were no advertising fund assets or advertising fund liabilities as of December 29, 2009.

Meaning when we look at JMBA and we see that “cash and cash equivalents”, we need to add this “restricted cash” advertising fund to it to get a full picture. What is even more interesting is that on 12/31/2009, that # was zero, more evidence of a rapidly improving financial condition.

2. ASSETS HELD FOR SALE

Assets held for sale consists of Company Stores that the Company expects to refranchise. Such assets are recorded at the lower of the carrying amount or fair value less cost to sell. Fair value is determined based on the purchase price in the asset purchase agreement. Assets are no longer depreciated once classified as held for sale. Assets held for sale of $2.3 million and $2.6 million as of July 13, 2010 and December 29, 2009, respectively, include property, fixtures and equipment and are included in prepaid expenses and other current assets on the Company’s balance sheet.

Then this from a recent 8K

As previously disclosed in our Form 8-K filed on May 28, 2009, Jamba, Inc. (the “Company”) approved a plan to refranchise up to 150 company-owned stores, primarily outside of California. At the time of filing, the Company was unable to determine whether any charges would be incurred or in good faith make a determination of an estimate or range of estimates required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to the costs and charges that may be incurred related to its refranchising efforts. This amendment updates the disclosure in Item 2.05 of our previously-filed Form 8-K filed on May 28, 2009.

To date, the Company has refranchised 102 stores for which the Company incurred aggregate impairment charges of $5.5 million. The Company does not expect to incur additional charges for the refranchising of the balance of its stores identified for refranchising.

Back to the 10Q

9. OTHER OPERATING, NET
Other operating, net includes gains or losses recognized in connection with the refranchise of certain Company Stores. During the 12 week and 28 week periods ended July 13, 2010, the Company recognized a gain on sale of refranchised stores of $1.0 million and $3.2 million, respectively

From this we can say the remaining store to be refranchised will be at a profit…….Why?

11. SUBSEQUENT EVENTS
The Company completed the sale of 33 of its Company Stores in refranchising transactions since July 13, 2010. A gain on sale from these transactions will be recorded during the fiscal third quarter ending October 5, 2010.

Investing Activities
In the 28 week period ended July 13, 2010, net cash provided by investing activities was approximately $3.2 million compared with net cash provided by investing activities of approximately $0.2 million in the prior year period. Cash provided by investing activities for the 28 week period ended July 13, 2010 resulted from $8.5 million in proceeds from the sale of our Company Stores pursuant to the refranchising initiative. These cash increases were offset by capital expenditures of $5.3 million in the current period.

Capital expenditures are used for funding Company Store refurbishments, the opening of new Company Stores, investing in new equipment to support expanding our food and beverage capabilities and upgrading our information technology systems. Capital expenditures for the 28 week period ended July 13, 2010 total approximately $5.3 million as compared to approximately $5.9 million for the prior year period. In fiscal 2010, we expect capital expenditures to be between $9 million to $11 million depending on our liquidity. During the 28 week period ended July 13, 2010, we opened one new Company Store. We expect to open less than five new Company Stores as we focus our growth on franchise development.

What are the refranchised stores selling for?

On May 28, 2009, we announced the launch of a refranchising program that is expected to involve as many as 150 Company Stores primarily located outside of California to existing or prospective franchisees. As of July 13, 2010, the Company has sold a total of 69 stores for an aggregate gross selling price of $15.0 million since the inception of its refranchising initiative. During the quarter, we sold 22 stores for an aggregate gross selling price of $4.3 million. We expect the sale of Company Stores to generate additional cash which we intend to use to fund future growth initiatives and for working capital.

The most recent stores sold for $195.5k each vs a $217.3k avg. for all refranchised stores sold to date. One would expect the premier locations went first, thus the higher prices paid. What is important here is that they are still selling for a profit which means there is still demand for them and their carrying value is below their true value.

All in all a great 10Q as it gives us great insight into what has gone on to date with the initiatives and what is coming up.