U-Swirl, Inc. Acquires Fuzzy Peach Frozen Yogurt, Expanding Store Network by 6%
Company Announces $1.5 Million Reduction in Debt Owed to Rocky Mountain Chocolate Factory, Inc.
HENDERSON, NV - (Marketwired - Feb 20, 2014) - U-Swirl, Inc. (OTCQB: SWRL) today announced that its wholly-owned subsidiary, U-SWIRL International, which operates and franchises self-serve frozen yogurt cafés, has acquired the business assets of Fuzzy Peach Franchising, LLC. The acquisition of all intellectual property and worldwide franchise and license rights includes the rights associated with 17 currently operating Fuzzy Peach Frozen Yogurt stores. The stores are located in North Carolina, South Carolina, and Virginia. U-Swirl purchased the Fuzzy Peach Franchising, LLC assets for $481,000 in cash paid at the time of closing, plus an earn-out that could increase the purchase price by up to another $349,000 based upon royalty income generated by Fuzzy Peach stores over the next twelve months.
U-Swirl, Inc. is majority-owned by Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF).
"The completion of this acquisition increases the size of U-Swirl's store base by 6%, to a total of 286 units in 38 states," noted Ulderico Conte, Chief Executive Officer of U-Swirl, Inc. "This acquisition provides us with increased exposure in the southeastern U.S., where we aim to increase our presence and operating efficiencies. Our strategy has always revolved around a two-step procedure: first, to create economies of scale and cost savings for our franchisees, and secondly to evaluate the long-term value proposition of a single-brand concept."
"We are pleased to welcome Fuzzy Peach to the U-Swirl family of frozen yogurt brands as we continue to expand our competitive footprint within the $6 billion away-from-home frozen desserts market," continued Conte. "The self-serve frozen yogurt market is extremely fragmented, and we believe consolidation is necessary for the future success of the industry. U-Swirl intends to play an important role in this process as we pursue economies of scale through both organic growth and an aggressive acquisition program. In addition to our recent acquisitions of frozen yogurt chains, we are pursuing new store openings by franchisees under the U-Swirl, CherryBerry and Fuzzy Peach brands. We have 32 stores in various stages of development and expect 15 to 25 store openings under current brands in the next 12 to 18 months."
The Company also announced that it has received $1.5 million in advance product rebates from its largest supplier, and that such funds will reduce the outstanding balance on U-Swirl's debt obligation to its parent, Rocky Mountain Chocolate Factory, Inc. "Not only does this strengthen U-Swirl's balance sheet, but it will make available additional borrowing capacity from our parent company that can be utilized to fund future acquisitions," concluded Conte.
About U-Swirl, Inc.
U-Swirl, Inc. is an operator and franchisor of self-serve frozen yogurt cafés that offer frozen yogurt in 20 non-fat and low-fat flavors, including tart, traditional, and no-sugar-added options, along with fresh sorbet. Approximately 70 toppings such as fresh fruit, sauces, candies, and granola, are available to customize each serving of yogurt to the customer's individual taste.
In January 2013, the Company acquired frozen yogurt café assets, franchise rights and certain other assets from Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF) in exchange for a 60 percent controlling ownership interest in the Company, certain warrants and notes payable.
U-Swirl, Inc. is headquartered in Henderson, Nevada, and its common stock trades on the OTCQB under the symbol "SWRL." As of February 20, 2014, the Company and/or its franchisees and licensees operated 286 self-serve frozen yogurt cafés in 38 states and 4 foreign countries. Additional information on U-Swirl, Inc. is available on the Internet at www.u-swirl.com.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc., headquartered in Durango, Colorado, is an international franchisor of gourmet retail chocolate stores and a manufacturer of an extensive line of premium chocolates and other confectionery products. The company's common stock is listed on The Nasdaq Global Market under the symbol "RMCF." Additional information is available on the Internet at www.rmcf.com.
Rocky Mountain Chocolate Factory, Inc., which owns a majority interest in U-Swirl, Inc., is advised by investment banker Michael Levy of New York-based Levy Capital Partners.
Certain statements in this press release are "forward-looking statements". These statements finvolve risks and uncertainties, and the Company undertakes no obligation to update any forward-looking information. Risks and uncertainties that could cause cash flows to decrease or actual results to differ materially include, without limitation, seasonality, consumer interest in the Company's products, general economic conditions, consumer and retail trends, costs and availability of raw materials, competition, market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. Readers are referred to the Company's periodic reports filed with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The information contained in this press release is a statement of the Company's present intentions, beliefs or expectations and is based upon, among other things, the existing business environment, industry conditions, market conditions and prices, the economy in general and the Company's assumptions. The Company may change its intentions, beliefs or expectations at any time and without notice, based upon any changes in such factors, in its assumptions or otherwise, and it undertakes no obligation to revise or update publicly any forward-looking statements for any reason. The cautionary statements contained or referred to in this press release should be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue.