Denver, CO, (MARKET WIRE via COMTEX News Network) -- Spicy Pickle Franchising, Inc. (OTCBB: SPKL), fast casual restaurants serving all natural premium meat and poultry and other fresh products, provides this update on current business activity in both its Spicy Pickle and Bread Garden Urban Cafe chains.
Development has slowed considerably for the Spicy Pickle chain in the United States, but some expansion possibilities continue to exist. Bank financing for new franchise opportunities is simply not available in the current climate, and expansion will continue to be limited until capital becomes more readily available.
The following is a summary of existing expansion possibilities for the remainder of 2009 and possibly into 2010:
2009 Contraction Development and Possibilities Include the Following:
The Bread Garden Urban Cafe chain in Vancouver is not experiencing the same credit barriers to expansion, and is therefore positioned for more rapid expansion. The following is a list of Bread Garden activity in the Vancouver area:
The Bread Garden Urban Cafe chain continues to grow. Existing restaurants are upgrading and refreshing their menu items.
Commercial real estate prices have come down substantially, which bodes well for the long term profitability of future franchisees. Those with the financial strength to move forward are now in a position to negotiate very favorable terms in prime locations. The lack of financing for current and potential franchisees continues to be a roadblock to more rapid expansion and new franchise sales.
If the new stimulus package is enacted by Congress and financing becomes more readily available at the local level we could return to the previous growth levels we enjoyed over the past few years. In the meantime we continue to negotiate the best food costs we can while still maintaining our standard of delivering healthy and natural products without preservatives, MSG, additives, extenders or artificial colors or flavor. We are working on menu design that will provide choices to consumers of combinations and products that provide the same quality food but at prices that reflect the value that most consumers in the US are looking for today.
At the corporate level we continue to crunch numbers to reduce overhead. This included layoffs in the last part of 2008, restricted travel budgets, and other cost savings measures that reduce overhead but still leave the core infrastructure in place.
Our same store sales for 2008 compared to 2007 were basically flat, down only .02%. However 4th quarter sales were down 8.8%, reflecting the terrible fourth quarter for retail in general. Our sales statistics calculate sales net of sales taxes, comps and discounts and are not the only measure of performance and may not be comparable to other sales figures used by other companies. Additionally 20 restaurants opened during 2007 alone and therefore are not included in the yearly same store sales statistics. In our system we are much more focused on individual restaurants and cost control and marketing efforts at the local level that will establish the franchisee in his territory for the long run. Although times are obviously difficult for almost everyone we believe that times like these are also an opportunity to work hard and establish a foothold for better times ahead.
Marc Geman, CEO of Spicy Pickle Franchising, Inc., stated, "These economic times are bringing a lot of changes. Like most restaurants and other retail operations we are, for the first time in history, managing through a period of declining sales. Retail businesses in general will continue to struggle until consumer confidence returns. In our system many of our franchisees are working harder and more creatively to enhance sales and catering opportunities. We are working on efficiencies in the distribution system, store design, operations and other areas to bring costs down.
"We have reduced the start-up costs for the restaurants going into construction and have reduced labor costs by reorganizing the kitchen line. The new designs have been tested in one of our corporate restaurants in Denver and we will continue to build in efficiencies that will enhance margins to help offset lowered revenue expectations while maintaining excellent customer service."
Currently, there are 50 Spicy Pickle and Bread Garden Urban Cafe restaurants operating in British Columbia and 13 different states.
Our investors and shareholders are always welcome to call or write in for additional information.
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(R) restaurant is quality, service and an enjoyable atmosphere. The company is headquartered in Denver, Colorado, with restaurants open or under construction across 13 states and more in development nationwide. Spicy Pickle Franchising, Inc. also operates as franchisor for Bread Garden Urban Cafes, a concept with restaurants in the metropolitan Vancouver, Canada area. Bread Garden Urban Cafes serve coffee, pastries and breakfast items as well as lunch and dinner along with a wide variety of desserts.
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.
SOURCE: Spicy Pickle Franchising, Inc.