"However, we continue to focus on executing our key drivers of long-term success," Koziel said, among them "maintaining strong operating discipline," aggressive franchise recruitment and an increase of new company stores. Indeed, Koziel relayed that Cosi has secured commitments from 33 franchisee developers who would collectively deliver 378 units on top of 20 new stores already in business.

The additions would substantially boost Cosi's dining footprint nationally, with the firm operating 113 company-owned restaurants and 19 franchise locations as of the end of March. Cosi opened three company units and six franchise restaurants during the first quarter.

The opening quarter produced $32 million in total revenues, up from $29.6 million in the first quarter of 2006, while company-owned net revenue was up to $31.6 million from $29.4 million. Franchise fees and royalty revenues more than doubled year-over-year, from $187,000 to $432,000, a figure expected to grow substantially as the expansion goals are realized.

The company recently issued a market survey indicating the Cosi concept could support upwards of 1,900 restaurants in 75 prime markets, while the firm is exploring cooperative arrangements with retailers such as Macy's to incorporate Cosi's in their stores. The firm is also embracing a new design launched at a restaurant in Avon, CT. The concept is now in use at 32 units, including two existing stores that were remodeled.

Comparable sales for the quarter measured stores in business for at least 15 months. The 2.4% drop from 2006 contributed to a per-share loss of 11 cents for the quarter, although Koziel says the underperforming newcomers also contributed to the decline. Listed on Nasdaq, company shares closed last week at $5.51, about half the 52-week high of $10.19. Cosi officials were unavailable to discuss the results, but did announce a teleconference and webcast on May 10th at 5 p.m.

Minus California, Florida and Washington, Cosi is focused almost completely in the Northeast and Midwest. Founded in 1996, the company is in 11 Illinois markets, the most of any state. The next most is seven in New York, while there are six each in Connecticut, Michigan and Pennsylvania.

Using the slogan, "Taste, in food and attitude," Cosi bills itself as a "premium convenience restaurant," and has a menu built around its unique flatbread, which is cooked before diners in open-flame stone ovens. Other fare includes salads, made-to-order sandwiches, soups, "gourmet" beverages and desserts.

Cosi suffered a personnel loss in the first quarter when CEO Kevin Armstrong resigned for health reasons. Director Robert Merritt was appointed on an interim basis and a search committee was established to find a permanent replacement.