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Lock
in WLSA Gain, Spicy Pickle Heads to Houston |
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Sometimes
the same news over and over again can start to get old. Somehow for
Spicy Pickle (OTCBB:
SPKL) though, more of the same just gets more and more exciting.
Maybe
it's because all the good news is cumulative rather than
repetitive.
 Though
you may have a decent idea of what you're about to hear, it's still well
worth
mentioning. Spicy Pickle attracted yet another franchisee that's already
committed to multiple units. This time, a ten-store agreement has been
made for the Houston area.
With that deal
now inked, there are officially 126 restaurants either up and running or
on the way....123 franchisee-owned, and 3 more company-owned. Of
the 126, 36 are already in operation. Just for perspective, when we started
watching Spicy Pickle back on September 21st, there were only 26 stores
in operation, and commitments to about 54 more stores.
The announcement
fell on the heels of last
Thursday's similar announcement of leases being signed for two of the
company-owned stores. Both of those stores will be built in Denver, Colorado
where the company is headquartered.
If you're new
to Spicy Pickle, or new to the Micro Cap Press newsletter, it may be worth
your while to scroll
back through all of our previous coverage. Not once is there anything
earth-shattering. However, the constant stream of (1) newly opened
stores, (2) new franchisees making multiple store commitments, or
(3)
new leases being signed for stores sends a clear message in itself...the
company's not about to ease off on growth.
So what kinds
of dollars does this mean?
 One
of the big challenges with Spicy Pickle has been nailing down some numbers
when the target is always moving. A few weeks ago there were 26 operational
stores, and now there are 36. A few weeks ago there were 56 more franchise
commitments, and now there are 87. That's not a bad thing for investors,
since it's all due to growth. You just have to jog to keep up.
That said, here's
the best snapshot we can take right now. With each franchised unit contributing
about $50K each year to the company's top line, we figure all 123 units
will mean about $6.1 million in high margin revenue. Don't forget the company
owned stores though...there are three in the works right now. They'll add
$2.2 million to the top line, and maybe a few hundred-thousand in profits.
That's around $8.3 million in total revenue.
If there's one
thing we've learned about Spicy Pickle though, it's this...they can open
stores on one hand and attract new franchisees with the other.
At their current
rate, by the time they get all 123 franchises opened along with a dozen
or so company-owned stores, they may have commitments for another 300 restaurants.
It certainly won't be tomorrow - or even in 2008 - but those kinds
of numbers could eventually generate revenues in the $20 million+ range.
The full press
release is below. In the meantime let's take another good look at the chart.
In last
week's edition we mentioned SPKL had been framing a triangle/wedge
pattern since November. Traders generally like to see a shape like
this, since the wedge will eventually converge into itself. When
it does, poof - the stock has to move one way or the other outside
of the triangle.
 The
exciting part is the likely volatile move the stock will see once the wedge
finally breaks. Think of it as a rubber band being pulled taut. The more
you stretch it, the harder it snaps once it's finally released.
Presently, most
chart analysts would say there's no conclusive evidence about which side
of the triangle will break (and we'd agree). There may be a couple of hints
though.
First, take
a look at the volume bars. The bullish green bars are taller than
the bearish red ones, and we're starting to see more of them. Second, notice
which
edge of the triangle is under the most pressure...the upper
one. The lower 'support' side of the triangle has been a rally point, while
the upper 'resistance' side has been under attack quite a bit.
As of right
now, the upper line of the wedge is at $1.30, so that may well be the level
to watch. It's falling a little each day though, so the hurdle should be
lowered if not surpassed within the next couple of days. Though we don't
see it taking this long to happen, the wedge will be completely closed
by February 25th. .
This one's turning
into a saga pretty quickly, though we do think it's time to end this chapter
by going ahead and taking some profits.
 For
anybody who heeded our mention of Wireless Age Comm. (OTCBB:
WLSA) back on November
27th - when the stock was trading at 19 cents - we strongly
encourage you to book at least some your 89% gain. The stock rocketed
to a close of 36 cents yesterday, which we mentioned was likely to happen
back on January 23rd.
After seeing
a deep
low and solid intra-day recovery on the 22nd (a 'hammer') right
as the 50 day moving average line was brushed, we figured some bargain
shoppers had finally found a price they couldn't pass up. The ultimate
net result was the last two days...a huge rally on unusual volume.
Our original
take hasn't changed...this looks like the kind of company with very
nice long-term potential, and may pan out to be a great investment. In
the meantime, it's still offering up some outstanding short-term
trading opportunities due to more than its fair share of volatility.
The last couple
of sessions may have been too much, too fast. A bird in the hand?
That's what we see, though it's ultimately your call.
Here's the Spicy
Pickle news.
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Spicy
Pickle(tm) Announces a 10 Store Franchise Agreement in Houston
Monday, February
4, 2008, 4:10 ET
DENVER, CO--(MARKET
WIRE)-February 4, 2008 -- Spicy Pickle(tm) fast casual restaurants (OTC
BB: SPKL.OB) today announced the sale of a multi unit restaurant development
for Houston, TX, bringing the total number of franchises sold up to 123.
The development
agreement includes the greater Metropolitan Houston area including Sugarland
and calls for a total of ten (10) Spicy Pickle(tm) restaurants over the
next several years.
Marc Geman, CEO
of Spicy Pickle Franchising, Inc., commented: "We continue to have a lot
of interest in Texas and already have two successful restaurants in Austin
with a third under construction. Texas can support a large number of stores
and demographically contains a huge population base of our ideal customers.
We have interest from Dallas and San Antonio, and expect Texas to be a
large, if not the largest state outside of Colorado in numbers of Spicy
Pickle(tm) restaurants."
Mr. Geman further
commented, "Our new franchisee formerly operated a chain of funeral homes.
While it may seem like an odd transition, there are in fact many similarities.
Both business models are very customer service orientated. Our franchisee
understands the competitive landscape of retail business. Having already
operated a very successful chain, they are very well financed. They understand
local marketing and have their staff working in the fast casual restaurant
segment. They will be in a position to open restaurants as quickly as we
can find suitable real estate. Our demographic program has already developed
a model Spicy Pickle(tm) restaurant location to work in the Houston market."
In combination
with the 3 corporate stores and the 123 franchises sold to date, Spicy
Pickle(tm) now has commitments for 126 units in total of which 36 are currently
open.
About Spicy Pickle(tm):
Founded in 1999,
Spicy Pickle Franchising, Inc. (OTCBB:
SPKL) serves high quality meats and fine artisan breads, baked fresh
daily, along with a wide choice of eight different cheeses, twenty-two
different toppings, and fourteen proprietary spreads to create healthy
and delicious panini and sub sandwiches with flavors from around the world.
As a leading "fast-casual" concept, Spicy Pickle(tm) offers menu items
that are far beyond traditional fast food -- but without the price point
of casual dining. The hallmark of a Spicy Pickle(tm) restaurant is quality,
service and an enjoyable atmosphere. The company is headquartered in Denver,
Colorado, with franchised locations now open across 12 states and many
more in development nationwide. For more about Spicy Pickle(tm), including
franchise information and inquiries, visit http://www.spicypickle.com.
Forward-Looking
Statements:
Certain statements
in this press release, including statements regarding the number of restaurants
we intend to open, are forward-looking statements. We use words such as
"anticipate," "believe," "could," "should," "estimate," "expect," "intend,"
"may," "predict," "project," "target," and similar terms and phrases, including
references to assumptions, to identify forward-looking statements. The
forward-looking statements in this press release are based on information
available to us as of the date any such statements are made and we assume
no obligation to update these forward-looking statements. These statements
are subject to risks and uncertainties that could cause actual results
to differ materially from those described in the statements. These risks
and uncertainties include, but are not limited to, the following: factors
that could affect our ability to achieve and manage our planned expansion,
such as the availability of a sufficient number of suitable new restaurant
sites and the availability of qualified franchisees and employees, risks
relating to our expansion into new markets, the risk of food-borne illnesses
and other health concerns about our food products, changes in the availability
and costs of food, changes in consumer preferences, general economic conditions
or consumer discretionary spending, the impact of federal, state or local
government regulations relating to our franchisees and employees, and the
sale of food or alcoholic beverages, the impact of litigation, our ability
to protect our name and logo and other proprietary information, the potential
effects of inclement weather, the effect of competition in the restaurant
industry, and other risk factors described from time to time in our SEC
reports.
Contact:
COMPANY CONTACT:
Marc Geman
CEO
Spicy Pickle
Franchising, Inc.
303-951-2530
Email Contact:
ir@spicypickle.com
Source: Spicy
Pickle Franchising, Inc. |
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Updated: 3:10 pm PST (23:10 GMT), November 20, 2008
