Since opening its first location seven years ago, Giggles N’
Hugs, Inc. (OTCQB: GIGL) has consistently demonstrated the immense market
demand for a healthy alternative to traditional family-friendly restaurant and
entertainment venues. As the first and only restaurant that brings together
high-end, organic food with cutting-edge entertainment for children, the
company’s concept has been a hit amongst families in its target areas. As a
result of this popularity, GIGL has since expanded to three locations
throughout Greater Los Angeles, and this success is catching the attention of a
growing number of potential franchisees.
“Since opening our first location in Southern California in
2008, we’ve received strong interest from franchisees seeking to take our
concept into new markets,” Joey Parsi, founder and chief executive officer of
GIGL, stated in a news release. “While franchising has always been a component
of our long-term growth strategy, we chose to establish a strong foundation… by
initially focusing on perfecting our experience at company-owned locations.”
Despite the company’s reluctance to commit to franchise
locations early in the development of its concept, GIGL’s recent performance in
the competitive Los Angeles market has driven expanded interest in franchise
opportunities. According to its news release, the company has received interest
from franchise operators in nearly every major U.S. city, as well as those in
international markets – including Europe, Latin America, the Middle East, Asia
and Australia.
Though GIGL hasn’t yet agreed to any franchise locations,
increasing interest has pushed the company to estimate the potential financial
benefits presented by these opportunities. In particular, GIGL expects to
receive licensing fees ranging from ‘several hundred thousand dollars to
millions of dollars’, in addition to ongoing royalties of as much as eight percent
of gross sales.
“[T]his strategy provides a great complement to our core
company-owned growth initiatives,” stated Philip Gay, chief business
development officer of GIGL. “Based on my extensive personal experience in
senior leadership positions with several highly successful enterprises that
have benefited from franchising, I believe GIGL is well-positioned for
long-term success in this arena.”
If the company decides to pursue growth through franchising,
it will gain improved access to an industry that’s posted strong financial
growth in recent years. According to a report by IBISWorld, the domestic chain
restaurant market has recorded annual growth of 3.8 percent for the past five
years, accounting for approximately $104 billion in revenue in 2014. The report
also highlights the importance of franchise agreements to this growth,
demonstrating the commercial viability of this proven strategy in the national
restaurant industry.
As GIGL continues to weigh the strategic advantages offered
by pursuing franchising opportunities, the company is in a strong position to
record considerable market growth in the future. For prospective shareholders,
GIGL’s innovative and highly marketable restaurant concept provides the company
with a platform upon which to promote sustainable returns.
For more information, visit
www.gigglesnhugs.com/investor-relations/
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