Press Release Source: Spicy Pickle Franchising, Inc.
Spicy Pickle Announces Two New Lease Signings and One Closure
Expansion Program Starting to Get Back on Track
Wednesday November 12, 4:10 pm ET
DENVER, CO--(MARKET WIRE)--Nov 12, 2008 -- Spicy Pickle Franchising, Inc. (OTC BB:SPKL.OB - News) 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(TM):
Founded in 1999, Spicy Pickle Franchising, Inc. (OTC BB
