Coffee Republic, the AIM-listed coffee and deli bar operator, has reported a 4.8% drop in like-for-like sales for the year to 26 March. Turnover declined by 15% to £14.9m over the same period, as the company restructured its business to a more franchised offer. The company currently operates 44 bars, after disposing of two and acquiring one during its financial year. Of these 14 are franchises, which puts the company slightly ahead of its plan to complete one bar franchise per month. During the year the company franchised five bars all of which were company operated. The gross and net proceeds from franchising theses bars were £0.9m and £0.5m respectively. A further eight bars have been franchised since the year end, returning gross and net proceeds of £0.8m and £0.3m respectively. However, the company said it believed the progress of franchising was being “threatened by speculation on internet bulletin boards”, which included rumours of a management buyout of the company, and that it was suppressing positive trading figures. The group said that these rumours had led to substantial share price volatility, caused damage to its progress, and weakened its franchise pipeline. Bobby Hashemi, chairman of Coffee Republic, said: “Let me make this as clear as I can: there was no management buyout plan and there is no management buyout plan. I regret that any shareholder who bought shares on the basis of this speculation has been misled.” Hashemi said the remaining bars earmarked for franchise are expected to be transferred to franchisees during the next 18 months, leaving a small core of Coffee Republic “owned and operated” bars. It also plans to recruit three or four regional development franchisees per year over the next three years, after signing up two over the last year. The group said that like-for-like sales since the year end had improved and were up 3.6% during the last eight weeks. Hashemi said: “The core restructuring of the company is now complete and we have a clear strategy to recommence the expansion of the business. With the platform from which to deliver the strategy now in place, future success rests primarily on delivery rather than innovation.”