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Jamba Juice (NASDAQ:JMBA) was hard hit by the recession, but its latest earnings report shows signs of recovery. Jamba is now implementing initiatives that could have a lasting impact on business. Here are some things that I like about its business.

Comparable same store sales have seen increases for the third quarter. Company-owned locations have seen sales increase 4.3%, marking the third consecutive quarter of gains with sequential gains in eight of the last nine quarters.

Jamba has zero debt and $23.4 million in cash. The company also had net income of $3.9 million. The company hasn't had a profitable quarter in quite awhile.

The current menu expansion has seen success and will drive revenue growth going forward. Jamba will expand Whirl'ns Frozen Yogurt into 100 additional locations. Jamba will also target the breakfast market by offering hot breakfast wraps in 270 locations. Menu expansion and product innovation will continue to support the companies sales.

The company refranchised 174 company-owned locations. This is a big step in the right direction. Focusing on the franchise side of the business will help the company focus on important parts of the business like product innovation. Refranchising allows the company to unlock assets as well as free up capital that could be reinvested in other parts of the business.

Jamba could initially see sales decline as the company refranchises locations but the revenue is replaced with a much more stable and reliable royalty stream of income. The company is also expanding internationally through franchisees, which will be a great revenue driver going forward.

The company has a cumulative net operating loss of $98 million. This will be valuable as the company begins to turn profits.

I'm bullish on Jamba and feel it's starting to turn a corner in its business. I believe focusing on franchising is the right thing for Jamba. This will create a much more stable income stream which will start going to the bottom line, especially since Jamba doesn't have any debt. The international markets will also be a great hedge for the company as currency fluctuations may play towards Jamba's favor. This is especially true if we were to see the US dollar decline further. This will all take time to see the effects but could be a great opportunity for long term investors to play Jamba's turnaround. If you are looking to start a new position, give yourself room to buy a pullback to the $1 area, just in case the economy was to slow further.

Source: Jamba Juice: A Turnaround The Market Didn't See Coming