Muscle Maker, Inc. (Nasdaq: GRIL) today announced the posting of its first quarter 2022 financial results on May 12th for the three months ending March 31, 2022.
Michael Roper, CEO of Muscle Maker, Inc., commented, “The recently posted Q1 2022 financial results show an increase of 128% in restaurant sales revenue growth and an increase of 54% in franchise royalties and fees when compared to Q1 2021. Not only have we experienced a top line revenue increase when comparing Q1 2022 to Q1 2021, but we are also seeing our operating metrics improve when comparing Q1 2022 to Q1 2021 even with the rise in inflationary costs related to labor, food/paper and services. We are seeing improvements in our operating expenses when comparing Q1 2022 to Q1 2021 across all major categories, as a percentage of restaurant sales:
- Food/paper costs improved by 4.7%
- Labor costs improved by 24.1%
- Rent improved by 9.1%
- Other operating expenses improved by 5.7%
In addition, our overall selling, general and administrative cost improved by 55.3% when comparing Q1 2022 to Q1 2021 even after integrating our acquisitions of Pokemoto and Superfit Foods in 2021.”
Roper continued, “We are very excited to finally be able to fully execute against our growth strategy while maintaining a strong liquidity position. Pokemoto has 37 franchise or development agreements sold but not yet open. Several of these locations will be entering our hands-on training program this month. It’s one thing to sell franchise agreements which helps our overall cash flow, it’s even more important to get these locations open which drives high margin franchise royalty fee revenue into the system. While we execute our franchising growth strategy with Pokemoto, we have been able to maintain a strong liquidity position which allows us to open additional corporately owned Pokemoto locations. We currently have corporate locations under construction in Philadelphia, PA and Jacksonville, FL and are reviewing several of our current military base locations for the potential to add Pokemoto or to convert to Pokemoto.” As of March 31, 2022, Muscle Maker, Inc. had a cash balance exceeding $14 million.
“While we focus our growth strategy on Pokemoto, we are sharpening our pencils with the goal of reducing costs in the Muscle Maker Grill restaurant division while exploring opportunities to co-brand Muscle Maker Grill with Pokemoto locations or fully convert Muscle Maker Grill locations over to Pokemoto, where applicable. We recently converted our Fort Meade location to Pokemoto and are extremely pleased with the sales results so far. In addition, our SuperFit Foods division is in the process of redesigning the website and software to enhance the user experience and increase efficiency, expanding pick-up cooler locations and broadening the menu with new options. Our intent is to relaunch the SuperFit Foods website and ordering software with new features in Q3.”
Additional Q1 milestones span across all departments and include:
- Expanded executive team with Jennifer Black joining as CFO
- Hired new Pokemoto franchise sales team
- Hired new Pokemoto franchise training team
- Launched franchise sales campaign including social media, digital advertising, SEO and trade shows
- Pokemoto entered new states with openings in Florida and Maryland, including Fort Meade military base
- Pokemoto now open or franchise agreements sold in Mississippi, New York, Connecticut, Rhode Island, New Jersey, Florida, Massachusetts, Maryland and Virginia
- New Pokemoto corporate owned locations under construction in Pennsylvania and Florida
- All PPP loans forgiven
- Implemented new lease accounting
- Renegotiated new insurance policies with better coverage and rates
- Outsourced IT functions
- Negotiated new rebates with vendors
- Launched new Pokemoto interior and exterior package
- Rebranded SuperFit Foods
“Needless to say, it has been a busy quarter and we are excited about the future of all of the brands under the Muscle Maker, Inc. umbrella.”