Gigl corporate presentation 4 15-14
- 1. OTCQB: GIGL Corporate Presentation September 17, 2013 www.gigglesnhugs.com
- 2. This presentation contains forward-looking statements. These statements relate to future events or expectations regarding our future financial performance. These statements are only predictions and involve risks and uncertainties, including, but not limited to the ability to open the new location, fulfill the terms and obligations of the lease, and any other difficulties related to risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents we file from time to time with the SEC. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 2 Important Cautions Regarding Forward- Looking Statements © 2013 Giggles N’ Hugs, Inc. – All Rights Reserved
- 3. A pioneer concept in the family themed restaurant industry with unique children’ play space Organic & nutritious menu with a high quality menu items made from local, fresh foods Trained “aides” promote family-friendly feel and play with kids Multiple revenue drivers generate attractive store- level profitability opportunities Large mall operators have expressed keen interest in rolling out the concept nationwide 3 Overview
- 4. Family restaurant that addresses an unmet need for high-quality, healthy food in a safe, themed entertainment environment for children. 3 locations currently with significant interest from the largest global mall developers for many more who have also contributed significant cash and rent concessions. Our “prototype” has been met with significant patron adoption, good margins of profitability, and widespread media coverage. Revenues: 2011: $1,116,150, 2012: $1,348,691 2013 (6 months): $1,010,431 4 Who We Are…
- 5. 5 Some of the Celebrity Clientele Generating Positive Press Coverage
- 6. Recent “Free” Press Coverage Sampling of publications featuring stories on Giggles N’ Hugs…
- 7. Founded by CEO, Joey Parsi, and his wife, Dora Parsi, in response to frustration they experienced dining with their children. Recognized and addressed a substantial void in the market by opening the first Giggles N Hugs restaurant in Brentwood, California in February 2008. Brentwood was an immediate success, that enjoyed profitability and widespread media coverage. Westfield approached them for an expansion proposal, including possible nationwide rollout. In 2010, opened their second restaurant in the Westfield Century City Mall, with Westfield agreeing to pay 60% of construction costs, with additional concessions. Opened a second location in March 2013 in the Westfield Topanga Shopping Center, and on February 15, 2013 executed a lease for a third location in the Glendale Galleria Mall, which opened in Novemer of 2013. The current landlords, Westfield and General Growth Properties, have offered very favorable tenant improvement concessions and landlord financing on existing leases. 7 Our History
- 8. Smile and befriend the guest at ALL times Deliver delicious nutritious food Sincere hospitality & service excellence Cleanliness & safety Creating magical moments Mission: “To satisfy every parent’s need for a restaurant that serves healthy, delicious food and caters to their children's experience as much as their own.” Our Mission & Core Values 8
- 9. Kid-friendly play area in a true restaurant environment Delicious, nutritious, organic menu catered to young children (1-10) and accommodative to parents Entertainment, such as puppet shows & themed nights Trained “aides” assist with children’s enjoyment while parents relax Child drop-off service (while parents shop) First and only restaurant to offer this service in LA 9 What Sets Us Apart?
- 10. Admission fee for play area access Food and Beverages Birthday parties & private rentals Drop-off service Alcohol (beer & wine) Branded In-store and retail outlet merchandising (licensing & merchandising model) U.S. and International Franchising 10 Multiple Revenue Streams
- 11. Westfield Mall – Century City, CA Opened Dec. 2010 – “Flagship location” Annual run rate of $1.4 million in sales and $285,000 in EBITDA (21% net operating margin) 6,100 sq. ft. 24% of households with children¹ 21% of household income >$100k¹ Westfield Topanga Shopping Center – Canoga Park, CA 10-year lease signed – February 2012 Opened end of March 2013 5,900 sq. ft. 38% of households with children¹ 30% of household income >$100k¹ Glendale Galleria (General Growth) – Glendale, CA 10-year lease signed – February 2013 Slated to open October 2013 6,000 sq. ft. 47% of households with children 23% of household income >$100k 11 Where We Are Today… ¹Westfield February 2012 Demographic Report.
- 12. While fast food restaurants offer cheap food in cookie-cutter buildings, themed restaurants offer a good meal, as well as an experience. In 2011, there were 19.5 million kids’ parties at restaurants.¹ NPD CREST research finds that kids are eating more healthful food options than ever before.¹ Children five or younger are most likely to influence restaurant visits.² The average visitor stay at a family entertainment center is 2.5 hours, and they typically visit up to 6 times per year.³ Market Opportunity 1) The NPD Group, “Better Deals and More Sophisticated Palates Contribute to Kids Meal Declines.” May 22, 2012. 2) “The New American Diner Study,” by Restaurants & Institutions. August 2007. 3) Family Entertainment Center White Paper by JamVentures Management, 2010. 12
- 13. Backfill Southern California market Longer-Term Target markets: Seattle, WA Vancouver, B.C. San Francisco, CA East Coast Evaluating multiple franchise requests from around the U.S. and the world 13 Expansion Goals
- 14. The Westfield Group is highly interested in expanding Giggles N’ Hugs to all 55 of its U.S. mall locations Offering to pay +60% of construction costs (i.e., “Tenant Allowance Dollars”) Negotiating deals on a per-location basis Also in discussions with other REITs and major mall operators Macerich Group (NYSE: MAC, $83B market cap): 62 regional shopping centers, 64M sq. ft. of gross leasable area General Growth Properties (GGP): 135 property portfolio The “Westfield Opportunity” 14
- 15. Target: High traffic, upscale retail centers & shopping malls Lifestyle/entertainment centers Areas with children under the age of 10 Empirical site selection model Rigorous ROI review Prototype: 6,000 sq. ft. & 150 seats 15 Site Selection Strategy
- 16. 16 Planned New Store Rollout Schedule 2013 (A*) 2014 2015 2016 2017 Q1 1 (Topanga*) 0 2 3 4 Q2 0 1 2 3 4 Q3 0 1 3 3 4 Q4 1 1 1 2 4 Projected Cumulative Stores 3 6 14 25 41 Three Months Ended June 30, 2013 Topanga Revenue $374,459 Total Cost & OP EX ($312,054) EBITDA margin 16.666% The following is a diagram of the expected nationwide new store rollout schedule for current year 2013 through the end of 2017. The flagship store in Century City has been in existence since December 2010. The Topanga location showed solid results in its first quarter of operation. This is a testament to a well chosen location and the strength of the Giggles N’ Hugs brand.
- 17. Signed agreement with The Licensing Shop (TLS) to extend the Giggles ‘N Hugs restaurant experience into “on-brand” products TLS specializes in the strategic development of consumer products Expertise: Extending brands into licensed products Creating new revenue streams Reaching new customers 17 Licensing & Merchandising Strategy TLS Sample Clients
- 18. We plan to sell our branded merchandise in-store as well as to top tier retail outlets Further expansion opportunities into organic, high- quality clothing & food line Top-tier retail targets – Nordstrom, Bloomingdales, Whole Foods, etc. Examples: Food products (i.e., Frozen Pizzas with Mom’s Tricky Treat Sauce, Mac N Cheese with Mom’s Tricky Treat Sauce and Chicken Littles with Flax Seed) High-quality children’s apparel and accessories Drink ware/snack cups (BPA Free) Coloring books & stickers Children’s Vitamin Water 18 Multiple Retail Revenue Initiatives
- 19. Joey Parsi – Founder, President & Director Founded GIGL in 2007 20+ year career on Wall Street Lehman Brothers Sutro & Co. Investment advisor at TD Waterhouse (managed $350M+ in assets) & StockCross Financial Services Sean Richards – COO Joined GIGL in 2010 20+ Years of operations management experience. Regional Director at Hootwinc, LLC (overseeing operations of 7 Hooters restaurants, 1 casino & 2 bars) General Manager of The Viper Room & Pink Taco General Manager of the House of Blues, Planet Hollywood & Hard Rock Café 19 Management
- 20. Joan Barnes – Advisory Board Member Joined GIGL August 2012 Co-founder and former CEO of Gymboree Responsible for growing brand to 400 play centers Sold company for$1.8 billion or ~20x revenue Founder and former principle owner of YOGA STUDIO, sold to Yoga Works in late 2008 Philip Gay, CPA – Advisory Board Member +25 years experience operating restaurant concepts Former president & CEO – Grill Concepts, Inc. Former CFO – California Pizza Kitchen & Wolfgang Puck Food CEO & COO – Diversified Food Group Former CEO – Color Me Mine Managing Director of Triple Enterprises 20 Advisory Board Glenn Golenberg, CPA – Advisory Board Member 35 years of investment banking, private equity & financial restructuring experience Co-founder and Managing Director of Golenberg & Company Managing Director of Bellwether Group Advisor to 200+ transactions & arranged financings in excess of $1 billion Chairman and Director of numerous publicly and privately held companies and committees including The Finance Committee and Investment Committee of Cedars-Sinai Hospital Executive board of the Wharton Graduate School of the University of Pennsylvania where he received his MBA
- 21. A pioneer concept in the children’s themed restaurant industry Organic & nutritious menu with versatility and depth Trained “aides” promote family-friendly feel Multiple revenue drivers generate attractive store-level profitability opportunities Large mall operators have expressed keen interest in rolling out the concept nationwide 21 Key Take-Aways
- 22. 22 Giggles N’ Hugs Contacts Giggles N’ Hugs, Inc. 10250 Santa Monica Blvd., #155 Los Angeles, CA 90067 Tel (310) 553-4847 Company Contact Joey Parsi, Founder and CEO Tel (310) 780-0770
- 23. Rated among best family & kid-friendly restaurants by CitySearch and GoCityKids Voted the #1 birthday party place in Los Angeles by Nickelodeon Voted “Best Pizza in Los Angeles” by Nickelodeon 23 Appendix: Awards & Accolades “Treat your children like the stars they are with red- carpet-worthy fun. Giggles ‘N’ Hugs, Tinseltown’s favorite tot hotspot, is where playtime, healthy food and happy families converge.” — L. Souris Hong- Porretta, Gilt City Editor
- 24. “I am a big fan of Giggles. This indoor playground has everything it takes for a great time: food, beer, wine, coffee, cookies, delicious, healthy pizza, not greasy and thick. What else do I need? Oh I forgot they also have complimentary wifi. A big plus!” – 5/2/12 “I love this place and so do my kids. Having two little ones to impress often makes it difficult unless you want to go to Chucky Cheese LOL...this place is perfect and the food is very good. Highly recommended.” – 5/15/12 “This place is wonderful! We had a great time when we went to check it out. It's kid friendly. The staff was really nice. I'm looking forward to different promotions they might have coming up, including the Easter Brunch. I would highly recommend this place to anyone I know with kids.” – 4/7/11 Appendix: What Our Customers Say…
- 25. Children’s MenuAdult Menu 25 Appendix: Organic & Nutritious Menus for Both Children & Adults
- 26. Appendix: Some of Our Most Popular Menu Selections 26
- 27. 27 Offering Summary Deal Size The maximum amount of the Offering is $3,000,000 .. Securities Offered (each consisting of convertible debentures (the “Debentures”) Coupon Seven percent (7%). Debenture Conversion Price $0.37per Unit. Exchange/Ticker OTCQB: GIGL Selling Agents WestPark Capital, Inc., a FINRA Member Firm Merriman Capital, Inc., a FINRA Member Firm Use of Proceeds New store openings, marketing, and working capital. *Important details regarding this offering can be found in the private placement memorandum.