Spicy Pickle Announces Two New Lease Signings and One Closure Expansion Program Starting to Get Back on Track
DENVER, CO--(Marketwire - November 12, 2008) - Spicy Pickle Franchising, Inc. (OTCBB: SPKL) fast casual restaurants announced its expansion program is beginning to get back on track.
Marc Geman, CEO of Spicy Pickle, stated, "The recent financial crisis has put the brakes on retail development. Now, for the first time in months, expansion activity is regaining some traction, and we are starting to see the early signs of a return to expansion in the system."
One new lease in Houston, Texas has been signed for our Spicy Pickle chain and another new lease for our Bread Garden Urban Café chain in Western Canada.
The new Spicy Pickle in Houston will be located at an existing end cap space at the South East corner of I-10 (Katy Freeway) and Kirkwood Road, in the Nottingham Shopping Center. It is positioned on the eastern side of Houston's "energy corridor"; already one of Houston's largest employment centers. The space is expected to be delivered within 60 days, and architectural planning is already underway.
The new location for the Bread Garden Café extends the reach of the chain to the magnificent setting in Vancouver on the campus of the University of British Columbia. This new restaurant will be located in a newly constructed housing project a block from the student union and in the middle of university housing. It has its own heated outdoor seating area which is weather protected.
Marc Geman, CEO of Spicy Pickle Franchising, Inc., commented: "The Houston location marks the end of a long process for our franchisee. From here, we can get started on the design, build out, training and grand opening. The premises will be available to the franchisee at the start of 2009. Our Houston franchisee is already looking at additional sites."
Mr. Geman further stated: "As we said before we have been working on sites in the Vancouver area even as we were negotiating the purchase of the Bread Garden Urban Café chain. This new site, along with the new Vancouver Airport site, represents the fruits of our labor and the hard work on the part of the team in Vancouver.
"It's a tough environment for expansion domestically, but there is a bright spot. Commercial real estate prices are finally starting to come down, and we are now in a position to negotiate some very favorable terms in prime locations for those franchisees that are ready to expand. We are on the verge of a number of additional new lease signings. We are still looking for locations in several US cities. Our Canadian subsidiary, Bread Garden Urban Cafés, is also looking for a number of additional locations. Western Canada is not experiencing the heightened financial turmoil we have in the US, and we anticipate continued expansion there as well."
The Spicy Pickle location in Sioux Falls, South Dakota was closed without notice to the franchisor in October and the premises, in full operational condition, was abandoned. The franchisee apparently has left the area. We are looking for another operator and have been in contact with the landlord who has secured the premises.
Mr. Geman commented, "In these economic times I expect we are going to see some fallout from franchisees that are not sufficiently capitalized to work through an economic downturn. We are confident the whole the system will continue to grow and most likely will be stronger by the time the economy starts to recover. Overall system-wide sales are what become important to achieving profitability and we are cumulatively adding to those sales.
"At the corporate level, we have been taking some cost savings steps to bring our overhead down to a level commensurate with the new environment and our ongoing cash flow. We plan to increase revenues while reducing costs at the corporate level to protect our shareholders as we move through this painful recession."
About Spicy Pickle™:
Founded in 1999, Spicy Pickle Franchising, Inc. (OTCBB: SPKL) serves high quality meats and fine artisan breads, baked fresh daily, along with a wide choice of eight different cheeses, twenty-two different toppings, and fourteen proprietary spreads to create healthy and delicious panini and sub sandwiches with flavors from around the world. As a leading "fast-casual" concept, Spicy Pickle offers menu items that are far beyond traditional fast food but without the price point of casual dining. The hallmark of a Spicy Pickle® restaurant is quality, service and an enjoyable atmosphere. The company is headquartered in Denver, Colorado, with restaurants open or under construction across 14 states and several more in development nationwide. Spicy Pickle Franchising, Inc. also operates as franchisor for Bread Garden Urban Cafés, a concept with 11 restaurants in the metropolitan Vancouver, Canada area. Bread Garden Urban Cafés serve coffee, pastries and breakfast items as well as lunch and dinner along with a wide variety of desserts. To find out more about Spicy Pickle (OTCBB: SPKL), visit our website at www.spicypickle.com/.
Certain statements in this press release, including statements regarding the number of restaurants we intend to open, are forward-looking statements. We use words such as "anticipate," "believe," "could," "should," "estimate," "expect," "intend," "may," "predict," "project," "target," and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on information available to us as of the date any such statements are made and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: factors that could affect our ability to achieve and manage our planned expansion, such as the availability of a sufficient number of suitable new restaurant sites and the availability of qualified franchisees and employees; risks relating to our expansion into new markets; the risk of food-borne illnesses and other health concerns about our food products; changes in the availability and costs of food; changes in consumer preferences, general economic conditions or consumer discretionary spending; the impact of federal, state or local government regulations relating to our franchisees and employees, and the sale of food or alcoholic beverages; the impact of litigation; our ability to protect our name and logo and other proprietary information; the potential effects of inclement weather; the effect of competition in the restaurant industry; and other risk factors described from time to time in our SEC reports.