Papa Murphy’s Holdings, Inc. Accelerates Refranchising Strategy
January 17 2017 - 8:00AM
Papa Murphy’s Holdings, Inc. (NASDAQ:FRSH) today announced that it
has expanded the scope of its relationship with Franchise
Performance Group, a strategic franchise recruiting advisory firm,
to include the refranchising of Company-owned stores in select
markets.
The Company has observed a strong correlation between the level
of penetration in a market and customer awareness, which in turn
drives sales. Accordingly, Papa Murphy’s has focused on investing
to accelerate unit growth in select underpenetrated markets in
order to reach a tipping point in penetration that enhances the
opportunity for local advertising and ultimately drives increased
sales and profits. The Company has achieved market scale and
efficiency by investing in new stores and consolidating stores from
exiting owners. Jean Birch, Chair of the Board and Interim Chief
Executive Officer of Papa Murphy's Holdings, Inc., said, “Our
long-term strategy has always been to deliver attractive returns
through an asset-light, franchised business model. More recently,
we have focused our financial resources on accelerating the build
out of several markets because we see materially stronger store
performance in markets with greater penetration and higher brand
awareness. We are excited to now enter the next phase of our
strategic development plan by refranchising these stores to
high-quality franchisees that are well-capitalized and can further
grow these markets. We are confident that Franchise
Performance Group is the right partner to help us realize these
efforts."
"Refranchising these locations will generate significant cash
flow which we will use to reduce leverage. As we sell company
stores, we retain the royalty annuity that investors find so
attractive in a franchised system. This, combined with our
previously announced, first-ever national television campaign, a
renewed focus on product innovation, and tight control on SG&A
management, positions us well to return the Company to profitable
growth," Birch concluded.
ABOUT PAPA MURPHY'S
Papa Murphy's Holdings, Inc. (Nasdaq:FRSH) is a franchisor and
operator of the largest Take ‘n’ Bake pizza brand in the United
States, selling fresh, hand-crafted pizzas ready for customers to
bake at home. The company was founded in 1981 and currently
operates more than 1,575 franchised and corporate-owned fresh pizza
stores in 38 States, Canada and United Arab Emirates. Papa Murphy's
core purpose is to bring all families together through food people
love with a goal to create fun, convenient and fulfilling family
dinners. In addition to scratch-made pizzas, the company offers a
growing menu of grab 'n' go items, including salads, sides and
desserts. Order online today at www.papamurphys.com.
ABOUT FRANCHISE PERFORMANCE GROUP
Franchise Performance Group is a leading franchise consulting
and brokerage firm specializing in the recruitment of high-caliber
franchisees across multiple industries. The company was founded in
2002 and provides a broad range of services to leading franchise
based companies and franchise owners, including outsourced buyer
lead generation and franchisee recruitment, franchise sales website
design, brand storytelling content consulting, franchisee
recruitment process design, franchisee recruiter training and
coaching; SBA financing; and strategic consulting.
FORWARD-LOOKING STATEMENTS This news release,
as well as other information provided from time to time by Papa
Murphy's Holdings, Inc. or its employees, may contain
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from those
anticipated in the forward-looking statements. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “guidance,” “anticipate,” “estimate,”
“expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future” and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events.
Forward-looking statements in this press release include
statements relating to the Company’s expectations for generating
cash flow from refranchising, the anticipated use of such cash, and
expected future results of operations. Although the Company
believes any forward-looking statements are based on reasonable
assumptions, you should be aware that many factors could affect our
actual financial results and cause them to differ materially from
those anticipated in any forward-looking statements. Please refer
to the risk factors discussed in the Company’s annual report on
Form 10-K for the fiscal year ended December 28, 2015 and quarterly
reports on Forms 10-Q for the fiscal quarters ended March 28, 2016
and September 26, 2016 (each of which can be found at the SEC’s
website www.sec.gov); each such risk factor is specifically
incorporated into this press release.
Any forward-looking statement made by the Company in this press
release speaks only as of the date on which it is made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future developments or
otherwise.
Investor Contact:
Fitzhugh Taylor, ICR
fitzhugh.taylor@icrinc.com
877-747-7272
Media Contact:
Christine Beggan, ICR
Christine.Beggan@icrinc.com
203-682-8329
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