SALT LAKE CITY - TruGolf Holdings, Inc. (NASDAQ:TRUG), a prominent provider of golf simulator technology, has announced a strategic partnership with Franchise Well to expand its global reach through a regional developer franchise model. The alliance is aimed at tapping into the growing market for immersive golf experiences off the course.
This move comes as the latest data from The National Golf Foundation shows a significant increase in off-course golf participation. In 2023, 32.9 million Americans engaged in such activities, with 18.4 million exclusively playing off-course. This trend indicates a shift away from traditional on-course play, with only 12.1 million playing exclusively on-course.
TruGolf's CEO, Chris Jones, emphasized the company's "Golf Easy" mantra and stated that franchising is a key strategy for making golf more accessible globally. With operations in over 30 countries, TruGolf aims to use franchising to efficiently scale their business and bring their technology to more enthusiasts.
The partnership with Franchise Well is set to propel TruGolf's growth by targeting seasoned franchise owners to lead the expansion. This model deviates from traditional franchising, which usually focuses on individual investors, by enabling developers to establish and grow territories for strategic market penetration.
Ben Litalien, Founder and Principal of Franchise Well, expressed excitement over the collaboration, noting that TruGolf aligns with current market trends of low labor requirements and high technology use. TruGolf offers a unique, tech-driven golf experience with minimal staffing needs.
TruGolf, established in 1983, has been at the forefront of indoor golf technology, creating award-winning video games, innovative hardware, and an e-sports platform with E6 CONNECT. Franchise Well is a strategic franchise development consultancy led by certified franchise executive Dr. Ben Litalien.
The press release contains forward-looking statements that involve risks and uncertainties, and actual results may differ materially from those anticipated. These statements are based on information available as of the date of the press release, and TruGolf does not undertake any obligation to update them.
InvestingPro Insights
As TruGolf Holdings, Inc. (NASDAQ:TRUG) embarks on its strategic franchise expansion, the company's financials and market performance provide a backdrop to its growth potential. TruGolf's market capitalization currently stands at a modest $18.56 million, reflecting a niche position within the industry. The company's revenue for the last twelve months as of Q3 2023 was reported at $20.35 million, with a notable quarterly revenue growth of 10.23%, signaling a positive trajectory amid its expansion efforts.
However, investors should be aware of the company's profitability challenges. TruGolf has not been profitable over the last twelve months, with an operating income margin of -33.1%. This is in line with one of the InvestingPro Tips, which points out that the company's valuation implies a poor free cash flow yield. Moreover, the stock has experienced significant price volatility, with a 1-week price total return of -25.93% and a 3-month price total return of -87.88%, underscoring the high-risk nature of the investment.
Despite these challenges, TruGolf's liquid assets do exceed its short-term obligations, suggesting a degree of financial stability in the near term. This is crucial as the company leverages its "Golf Easy" mantra to make golf more accessible on a global scale. For investors interested in a deeper analysis, there are additional InvestingPro Tips available, which offer insights into the company's cash burn rate, stock movements in relation to market trends, and debt levels. To access these insights and more, visit https://www.investing.com/pro/TRUG and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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