BAB, Inc. reported its financial results for the third quarter and nine months ended August 31, 2025, revealing a decrease in total revenues and a modest increase in net income compared to the same period last year. The company generated total revenues of $768.5 million for the three months ended August 31, 2025, down 11.8% from $871.9 million in the same quarter of 2024. For the nine-month period, revenues decreased by 9.9% to $2.33 million from $2.59 million in the prior year. Despite the decline in revenue, net income rose to $167.6 million for the third quarter, compared to $160.3 million in 2024, and for the nine months, net income increased to $438.2 million from $404.5 million.
The decrease in revenue was primarily attributed to a significant drop in marketing fund revenue, which fell by 36.2% to $186.9 million for the quarter, reflecting a corresponding decrease in marketing fund expenses. Royalty fees from franchised stores also saw a slight decline, totaling $511.7 million for the quarter, down 1.3% from the previous year. Franchise fee revenue experienced a more substantial drop of 66.7%, totaling $3.1 million, as there were no transfers in the current quarter compared to one transfer in the same period last year. However, licensing fees and other income increased by 34% to $66.8 million, driven by higher settlement revenue and gift card sales.
Operationally, BAB, Inc. maintained a stable franchise network, with 60 franchise units and 4 licensed units in operation as of August 31, 2025, compared to 64 franchise units and 4 licensed units a year earlier. The company also reported a total of 68 operating units, including those under development, which remained consistent with the previous year. The company’s employee count stood at 12, with 11 full-time and one part-time employee, reflecting a stable workforce dedicated to corporate management and oversight.
Looking ahead, BAB, Inc. plans to continue leveraging synergies between its brands, including Big Apple Bagels and My Favorite Muffin, to enhance operational efficiencies and drive growth. The company has indicated that it will focus on increasing marketing expenditures in the fourth quarter to support brand visibility and franchisee sales. Additionally, the Board of Directors declared a quarterly cash distribution of $0.01 per share, reflecting the company's commitment to returning value to shareholders while managing its financial resources prudently. The outlook remains cautious, with management acknowledging potential risks related to market conditions, competition, and operational costs as they navigate the remainder of the fiscal year.
About BAB, INC.
BAB, Inc. franchises and licenses specialty bagel and muffin retail stores under the Big Apple Bagels®, My Favorite Muffin®, and SweetDuet® brands across 18 U.S. states. It generates revenue primarily from franchise fees, ongoing royalties, and licensed product sales, including Brewster’s® coffee. The company supports franchisees with marketing, training, and supply chain services, leveraging brand recognition and product variety in the quick-service bakery café segment.
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