Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question from Michael Gallo of C.L. King.
Michael Gallo - C.L. King & Associates
A couple of questions -- you mentioned in your prepared remarks you were looking at some potential units for closure. I was wondering if you had any sense for how many units aren’t cash flow positive or what criteria that you are looking at as you evaluate potential closure?
Jeffrey A. Blade
Sure. Let me give you a little background -- as you’ll recall, this is part of an ongoing process that we’ve done over the last several years, so if you’ll recall, we closed nine units in 2003, we closed two in 2005, and we impaired or closed 14 at the end of 2007. So we’ve had an ongoing process of looking at units and what we said in the prepared remarks is this is basically a continuation of that process and we are interested in going a bit deeper in that regard.
With regard to any specific units that are not cash flow positive, again we continue to evaluate them and at the appropriate time, we’ll come forward and let you know exactly what we are thinking of. And again, in the past with the units, we’ve done one of three things -- we have either put in place a turnaround plan so if the store was cash flow negative, ensure that we could get it on the right track to be a successful, productive store, or we looked at franchising if that was a better option, given location or ability to operate. Or if neither of those two were viable, we would close the unit.
Michael Gallo - C.L. King & Associates
Okay, great, that’s helpful. The other question I wanted to ask is just on breakfast. I know you noted in your prepared remarks that you had some early encouragement from some of the results you were seeing. I was wondering if you can elaborate on that a little bit. I know it’s early but just to give us a sense for what you are seeing at breakfast, whether it’s bringing incremental guest count into the stores or -- and also whether when you promote breakfast advertising wise on television, whether you are seeing any cannibalization of guest counts at lunch and dinner. Thank you.
Jeffrey A. Blade
As you’ll recall, the breakfast menu relaunch that we did during the second quarter, it was several things. One, it was to relaunch some breakfast items that were specifically in the handheld sandwich arena, so we took our successful bagel sandwich, we created essentially three varieties of handheld bagel sandwiches as well as breakfast melts to play to drive-thru sales, which obviously is where most of breakfast sales in the restaurant sector have been taking place. So we did that and then we also reformulated our hash brown, introduced a breakfast smoothie which utilizes our frozen yogurt milkshake as a base, and then importantly, partnered with Seattle’s Best for a new coffee program.
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