A "getting started" type of question

[Golbez]

Newly registered member here. Not newly interested in trading stocks, I've always been interested in making more money but haven't taken the plunge yet.

I'm sitting here having gone through the Mad Money book by Cramer and looking at "Do your homework step #1" which deals with "researching how a company makes its money" by taking a look at SEC filings. One of his examples of a company that may have fooled people is Boston Market / Boston Chicken in that "most of their growth came from lending money to franchisees to get them off the ground and then gouging them."

Well I'm looking through one of Boston Market's 10K's http://sec.gov/Archives/edgar/data/894751/0000927356-98-000477.txt

I'm not figuring out where in this filing I would get the impression that their growth is coming from loans.

This is the first 10K I've looked at in my life, I'm sure I'll get better at finding the pertinent information I need to know and then getting out, but I could use a bit of help with this one :)

My background is in IT. I'm not a finance guy per se just yet.

[wallstreetsedge]

page 31

[Golbez]

Thanks, very helpful. So just to to settle things here, tell me if I'm reading this right?

Provision for loan losses - Franchisees weren't able to pay their loans, so the company took loan losses? The rates could have been too high and/or they were just not doing enough business to (feel like/be able to) pay them off.

General and administrative costs tripled at 1997, as did cost of products sold, salaries and benefits more than doubled but sales couldn't keep up. I assume classic example of company on the decline, besides the loan problem?

Losses of Boston Chicken Inc.'s area developers - Only reported in 1997, is this franchisee's reporting sales losses? The "developers" part makes it sound like it's the people building the stores taking losses (my initial guess).

Issuance of subsidiary's stock - Nothing, some, back to nearly nothing. Attempt made in 1996, proves fruitless, not attempted in 1997 (shares worth less $$?)

Am I right on any part of this? :) Am I looking at this the right way?