Generation Next Updates 2020 Forecast
Details Shared from
Recent Update to Reis
& Irvy’s Franchise Network
SAN DIEGO, CA -- September 19, 2019 -- InvestorsHub NewsWire --
Generation Next Franchise Brands, Inc. (OTCQB: VEND) updated its
projection for the current fiscal year revenue to range between $30
and $40 million with most of that revenue being recognized during
the second half (January – June 2020).
Earlier this month the Company announced an investment banking
engagement with Stout Risius Ross Advisors, LLC (“Stout”) to advise
and assist on potential financing and strategic opportunities.
Generation Next interim CEO, Ryan Polk, noted that the Company is
updating its fiscal year 2020 estimate to account for any risks to
production due to the Company’s tight control of cash while
management and Stout evaluate the various financing
alternatives.
The Company also announced it has ended its contract
manufacturing relationship with Flex and is ready to begin
production with new partners. “While working on the migration from
Flex to Stoelting, we concluded that additional companies should be
included in the discussion. This has turned out to be a good
decision and we have narrowed our options to two contract
manufacturers. One of these companies has been working extremely
hard and fast to launch a production line for the Reis & Irvy’s
kiosk. Manufacturing a high volume of units per month is what
people have always expected from this company and it is my
responsibility to meet this expectation, but proper financing and
quality control must be achieved before ramping volume.” Polk
indicated more detailed updates on this will be provided in the
coming weeks.
Polk explained that Generation Next leadership is taking a
conservative approach toward investing in inventory and ramping
production while the Company secures new capital. Until then, the
Company will support a low level of new kiosk production by
supplementing its existing inventory of $4 million in components
with a small amount of new part purchases to fill in gaps as
needed. Additionally, Generation Next has accumulated 160 fully
assembled kiosks which it will use for installations in highly
qualified locations during this transition period.
Generation Next also summarized a list of company priorities
which Polk discussed in a letter to the Reis & Irvy’s
franchisees.
- Building the Reis & Irvy’s Brand – The Company summarized
its plans to build Reis & Irvy’s into one of the most dominant
soft-serve brands by 2021 through its unique location network,
broad product offering, and data driven consumer marketing
programs. Generation Next indicates it will also have a loyalty
program and new Reis & Irvy’s app launched during the second
half of 2020.
- Focusing on Quality Locations – Earlier this year, Generation
Next shared it was using data gathered from the initial round of
installations to secure locations with the highest probability for
higher soft-serve sales. The top six categories prioritized by the
Company are airports, hospitals, hotels & resorts, large retail
stores, museums, and travel centers. Agreements have been reached
on a national level for airports, hospitals and large retailers.
Conversations and pending agreements are in place with leading
decision makers in the other categories. During July and August
daily sales in these six categories were 107% higher than sales in
the other location categories. As of September 13th,
2019 Reis and Irvy’s kiosks have sold over 800,000 cups of frozen
yogurt generating $4,000,000 in retail sales for franchise
owners.
- Working with Dannon YoCream on Product Development - YoCream
and Generation Next are planning the introduction of soft serve ice
cream in addition to frozen yogurt. Franchise owners of Reis &
Irvy’s unattended retail kiosks will have the option of serving
these new products throughout 2020.
- Restructuring the Company for Profitability and Expanded
Governance - The internal restructuring is complete and estimated
to reduce annual operating expenses by a minimum of $3 million.
Progress is also being made on the nomination of a third
independent Director for the Board.
- Increasing Kiosk Cash Flow - The Company repeated its intent to
focus on the quality of kiosk operations by franchise owners
including optimizing the site of each Reis & Irvy’s
installation and training on how to create and activate consumer
awareness.
- Adding International Reis & Irvy’s Licensees – East Asia
and the Middle East are the two territories the Company is
targeting for new Reis & Irvy’s licensees. This initial global
push is expected to generate commitments for 3,000 to 5,000 kiosks,
worth between $100 million and $200 million of revenue with most
deliveries occurring in 2021 and 2022 from an Asian manufacturing
facility.
- Launching a Company Owned and Operated Network – A limited
number of large-scale location agreements are being negotiated
which would require Generation Next to own and operate the kiosks.
If these agreements are executed, the deployment of company owned
and operated kiosks into these locations would begin during
2020. A structure is also being considered that would allow
franchise owners to partner with and take advantage of the
corporate operations.
Polk summarized his comments to the Reis & Irvy’s
franchisees by saying, “Since its inception our team has charted
new territory in unattended retail. Looking back, you can see the
progress made from the Robofusion concept acquired in December 2016
to the creation of a platform capable of delivering frozen
soft-serve on a mass market scale around the world. The value
creation opportunity is stronger today than yesterday because of
the knowledge gained and the relationships built during this
journey. Let’s execute well on what needs to be done today and keep
a long-term perspective on building the Reis & Irvy’s
brand.”
For more information, visit Generation NEXT
Website: www.gennextbrands.com or
call Toll-Free (888) 902-7558.
About Generation NEXT Franchise Brands,
Inc.
Generation NEXT Franchise Brands, Inc., based in San Diego,
California, is a publicly traded company on the OTC Markets trading
under the symbol OTCQB: VEND. Generation NEXT Franchise Brands,
Inc. Is the parent company to Reis & Irvy’s, Inc. Print Mates,
Inc. and 19 Degrees, Inc.
About Reis
& Irvy’s,
Inc.
Reis & Irvy’s, Inc. is a subsidiary franchise concept of
Generation NEXT Franchise Brands, Inc. (VEND). Launched in early
2016, the revolutionary Reis & Irvy’s Vending Robot serves
frozen yogurt, ice cream, sorbets and gelatos, and a choice of up
to six custom toppings
www.reisandirvys.com.
About Stout
Stout is a global advisory and consulting firm specializing in
Investment Banking, Valuation Advisory, Dispute Consulting, and
Management Consulting. Stout serves a range of clients, from
Fortune 100 corporations to privately held companies in numerous
industries around the world. Stout’s Investment Banking group
specializes in providing mergers and acquisitions (M&A) advice,
private capital raising, and other financial advisory services to
public and private companies. Learn more
at stout.com.
Stout is a trade name for Stout Risius Ross, LLC, Stout Advisors
SA, Stout GmbH, Stout Bluepeak Asia Ltd., and Stout Risius Ross
Advisors, LLC, a FINRA-registered broker-dealer and SIPC member
firm. The terms "Stout" or the "firm" refers to one or more of
these independent advisory practices.
This information is not intended as an offer to sell, or the
solicitation of an offer to buy, a franchise. It is for information
purposes only. No Reis & Irvy’s franchises will be sold to any
resident of any state until the offering has been exempted from the
requirements of, or duly registered in and declared effective by,
such state and the required FDD (if any) has been delivered to the
prospective franchisee before the sale in compliance with
applicable law. Currently, the following states in the United
States regulate the offer and sale of franchises: California,
Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York,
North Dakota, Oregon, Rhode Island, South Dakota, Virginia,
Washington, and Wisconsin. If you reside in one of these states, or
even if you reside elsewhere, you may have certain rights under
applicable franchise laws or regulations.
Cautionary note on forward-looking statements
This press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include, among others, statements
concerning our future financial performance, including statements
regarding: our ability to generate revenue and recognize deferred
revenue; our ability to timely launch delivery and installation of
our frozen yogurt robots; and our ability to grow our franchising
and licensing divisions and launch our corporate-owned and direct
sales platforms. The Company bases these forward-looking statements
on its current expectations, estimates and projections about future
events and the industry in which it operates using information
currently available to it. Actual results could differ materially
from those discussed in, or implied by, these forward-looking
statements. Forward-looking statements are identified by words such
as “believe,” “anticipate,” “propose,” “expect,” “intend,” “plan,”
“will,” “may,” “estimates,” variations of such words and other
similar expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. Factors
that could cause actual results to differ from those implied by the
forward-looking statements contained in this press release are set
forth in our filings with the Securities and Exchange Commission
(SEC), including our most recent Annual Report on Form 10-K for the
year ended June 30, 2018, our Quarterly Reports, and our Current
Reports on Form 8-K. Be advised that developments subsequent to
this press release are likely to cause these statements to become
outdated and the Company is under no obligation (and expressly
disclaims any such obligation) to update or revise any
forward-looking statements whether as a result of new information,
future events, or otherwise.