The following is a summary of franchise openings and closings for the fiscal years ended March 28, 2004, March 30, 2003 and March 31, 2002: Investment and other income consists of the following: 2004 2003 2002 Gain on disposal of fixed assets $ 206 $ 39 $1,226 Realized gains (losses) on marketable  securities 12 (242) 7 Unrealized losses on trading securities — — (43) Loss on subleasing of rental properties (312) (243) (215) Gain from the early termination of  sales agreement — 135 — Other income 553 467 593 $ 459 $ 156 $1,568 2004 2003 2002 Franchised restaurants operating at the  beginning of the period 343 364 386 New franchised restaurants opened  during the period 40 24 18 Franchised restaurants closed during  the period (45) (45) (40) Franchised restaurants operating at the  end of the period 338 343 364 21. Concentrations of Credit Risk 22. Advertising 18. Revenue Recognition—Branded Products Operations  19. Interest Income 23. Classification of Operating Expenses 20. Investment and Other Income The Company’s accounts receivable consist principally of receivables from franchisees for royalties and advertising contribu- tions and receivables from sales under the Branded Product Program. At March 28, 2004 and March 30, 2003, no franchisee or Branded Product Program customer represented 10% or greater of accounts receivable. (See Note D.)  The Company recognizes franchise royalties when they are earned and deemed collectible. Franchise fees and royalties that are not deemed to be collectible are not recognized as revenue until paid by the franchisee. Revenue from sub-leasing properties to franchisees is recognized as income as the revenue is earned and becomes receiv- able and deemed collectible. Sub-lease rental income is presented net of associated lease costs in the accompanying consolidated statements of operations.  The Company recognizes revenue from the Branded Product Program when it is determined by the manufacturer that the prod- ucts have been delivered via third-party common carrier to Nathan’s customers. An accrual for the cost of the product to the Company is recorded simultaneously with the revenue.  The Company administers various advertising funds on behalf of its subsidiaries and franchisees to coordinate the marketing efforts of the Company. Under these arrangements, the Company collects and disburses fees paid by franchisees and Company-owned stores for national and regional advertising, promotional and public relations programs. Contributions to the advertising funds are based on speci- fied percentages of net sales, generally ranging up to 3%. Net Company-owned store advertising expense was $241, $608 and $940, for the fiscal years ended March 28, 2004, March 30, 2003 and March 31, 2002, respectively.  Interest income is accrued when it is earned and deemed realiz- able by the Company. The Company recognizes gains on the sale of fixed assets under the full accrual method in accordance with provisions of SFAS No. 66 (See Note B-8). Deferred revenue associated with supplier contracts is generally amortized on a straight-line basis over the life of the contract. Cost of sales consists of the following:  Investments classified as trading securities are recorded at fair value and the unrealized gains or losses are recognized as a compo- nent of “Investment and other income.” During the fiscal year ended March 30, 2003, the Company liquidated its investment in trading securities. • The cost of products sold by the Company-operated restaurants, Branded Product Program and other distribution channels.  • The cost of labor and associated costs of in-store restaurant management and crew.  • The cost of paper products used in Company-operated  restaurants.  • Other direct costs such as fulfillment, commissions, freight  and samples.  2004 Annual Report  Nathan’s Famous, Inc. & Subsidiaries page twenty-two