Muscle Maker Grill Provides Shareholder Update

Rhea-AI Summary

Muscle Maker, Inc. (GRIL) shared an investor update on October 14, 2020, focusing on its non-traditional location growth strategy. The company plans to open new stores, including Ghost Kitchens, and targets military expansion after raising $5.6 million in equity. The appointment of Major General (retired) Malcolm Frost to the board aims to enhance military outreach. The company has already opened three Ghost Kitchen locations and plans to expand further. Muscle Maker aims to leverage opportunities arising from the COVID-19 pandemic while maintaining transparency with investors.

Positive

• Raised $5.6 million in additional equity to strengthen balance sheet.
• Opened three Ghost Kitchen locations, with plans for 30+ more.
• Appointment of Major General Frost expected to enhance military expansion efforts.
• Focus on university locations shows growth potential with less economic sensitivity.

Negative

• COVID-19 has slowed growth plans in military expansion.

*New Store Openings Targeted Across All Aspects of the Non-Traditional Model

*Potential Board Additions Strengthen Military Presence

*Recent Financing Provides Ample Capital to Expedite Growth

League City, TX., Oct. 15, 2020 (GLOBE NEWSWIRE) -- Muscle Maker, Inc. (Nasdaq: GRIL) As a newly public company, we feel it is important to provide open dialog and updates to our investors, in order to keep everyone abreast of the execution on our commitment to our non-traditional location growth strategy. After the market close on October 14^th, the Company published, via an 8K filing, a detailed investor update letter. This update letter is meant as a progress report regarding where we are today and where we hope to be in the near future. To access the detailed 8K filing, please visit the sec.gov site under company filings and Muscle Maker, Inc or click here:

https://www.sec.gov/Archives/edgar/data/1701756/000149315220019443/form8-k.htm

While nearly everyone has been impacted in some way from COVID, we see opportunity within the recent economic dislocation. We have seen an increased focus on, and an acceleration in, the adoption of our health-oriented offering throughout our conversations with larger non-traditional channels. An intended use of proceeds from our mid-February IPO was allocated to the continued expansion on the military front. With the opening of Camp Elmore we have remained committed to what we feel is a large and unique opportunity in the military. The pandemic has slowed this growth path, but the plan is still very much intact and we are beginning to see movement on that front, and hope to continue our expansion there very soon. To support those efforts, we have nominated Major General (retired) Malcolm Frost for a seat on our board; if successfully voted in, he will help steward our military expansion plans, not only with the Army, but throughout all of the branches of the Armed Forces.

A second area of non-traditional growth focus is a planned geographic expansion via the “Ghost Kitchen” model, while this had started pre-COVID, it has been greatly accelerated and emphasized as a result of our current environment. We continue to feel that this is an excellent opportunity, not only for the immediate future, but one that matches the changing dynamics of the industry. We were early movers in this area and formed a relationship with one of the largest and best funded players in this sector. We have previously announced an initial 10 location commitment to the “Ghost Kitchen” delivery-only model and have since signed leases for nine of these locations. We currently have opened three ghost kitchen locations with another four locations under construction and anticipated to open over the next quarter. We continue to hold discussions with several ghost kitchen companies and identify new locations to support our growth initiatives. Our plan currently calls for an additional 30+ ghost kitchens across multiple geographic markets. Ghost kitchens are a capital-light, company-owned expansion opportunity by which we can significantly increase our footprint, geographic reach and brand awareness in a way that we feel better fits both the current environment and the future of the quick service restaurant segment. We believe ghost kitchens are highly disruptive to the restaurant industry especially given the current Covid-19 climate and the growing need for off-premise food services and delivery. As an extension of this concept, we recently announced a pilot agreement with Reef Technology. Reef’s standalone kitchens are located in neighborhoods which are underserved by traditional delivery methods and will complement our ghost kitchen portfolio nicely. Reef is different from our other Ghost Kitchen relationships as they operate under a licensing agreement, which requires no capital outlay by Muscle Maker. We are hopeful that the pilot program, which gets under way in November/December can lead to a more in-depth relationship.

A third area of our non-traditional growth path includes universities. To date we have announced five location wins, recently opening two locations on the NOVA Community College Campus in Virginia and we intend to open Texas Tech by year end. Universities, like the Military opportunity, are an ideal strategic and demographic fit, as gaining access provides a high barrier to entrance on the competitive front, and student populations present large captive audiences with less economic sensitivity. The nation-wide opportunity for expansion throughout the University systems is something we intend to focus intensely on, and we anticipate having more to update investors on in this regard in the immediate future.

This month we successfully raised an additional $5.6m of equity to further strengthen our balance sheet, and to ensure that we are well capitalized to execute on our in-hand opportunities. Some of these opportunities have been previously announced and we will continue to provide updates as we continue to see our pipeline of attractive non-traditional opportunities grow. While our focus will remain on the non-traditional niche, the significant dislocation experienced by the entire restaurant industry has also began to present inorganic opportunities that may offer a more rapid and accretive growth path relative to our currently presented plans. This is not to say that we would pivot away from our organic expansion, but rather, look to augment that growth if the opportunity to buy vs build presents better economics and strategic synergies.

Ours is an execution story, and through that continued execution and expansion, we will look forward to creating sustainable value for all of our shareholders. Today’s shareholder update should be indicative of our desire to keep investors informed and aware of all of our corporate developments and we will continue to do so, in order that everyone can build their own clear picture of the opportunity. Again, a more detailed and expanded shareholder update letter is available on the sec.gov website with the latest 8K filing.

In closing, I would like to extend my personal appreciation to all of our employees, franchise owners, customers and shareholders for continuing to support our Company during these unprecedented times. We wish everyone and their families continued safety and good health.

Forward-Looking Statements

This press release may include “forward-looking statements” pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “should”, “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Muscle Maker, Inc does not undertake any duty to update any forward-looking statements except as may be required by law.

Contact:

Muscle Maker Grill Marketing:
marketing@musclemakergrill.com

Investor Relations:
IR@musclemakergrill.com

FAQ

What is the latest update from Muscle Maker, Inc. (GRIL)?

Muscle Maker's latest update focuses on non-traditional growth strategies, including new store openings and military expansion.

How much capital did Muscle Maker raise recently?

Muscle Maker raised $5.6 million in additional equity to strengthen its balance sheet.

What is the Ghost Kitchen strategy for GRIL?

Muscle Maker plans to expand its presence through Ghost Kitchens, having opened three with plans for over 30 more.

Who is Major General Malcolm Frost in relation to GRIL?

Major General Frost has been nominated to the board to assist with Muscle Maker's military expansion efforts.

How has COVID-19 impacted Muscle Maker, Inc. (GRIL)?

COVID-19 has slowed some growth plans, particularly in military expansion, but has also created new opportunities.