"We plan to place a few stores in each market to show a leadership position," John Wooley, the quick-service restaurant chain's CEO and president, said in a conference call with analysts and investors. He said the Austin-based company is talking to owners of multiple Scholtzsky's restaurants to find one in each market to work with. The company's stores are 3,200-sf freestanding units and smaller restaurants that are endcaps in retail centers.

The company Thursday reported net income of $750,938, 10 cents a share, on revenue of $16 million in the second quarter ending June 30. In comparison, Scholtzsky's incurred a $4-million loss or 54 cents per share on revenue of $14.6 million in 2000's second quarter.

The company wants to get franchised stores to use some of the same business practices and customer-related features that, Wooley said, are driving up sales of the company-owned stores in Austin. Same-store sales increased 6.6% in those stores. "These restaurants are serving as our proving ground for how restaurants should look, operate and perform across our franchise system," he said.