Investor Presentation July 2015 OTCQB: GIGL
OTCQB: GIGL Important Cautions Regarding Forward-Looking Statements 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. OTCQB: GIGL
OTCQB: GIGL Who We Are… Family restaurant and play space Healthier, high-end version of Chuck E Cheese Unique in the market place / First-of-a-kind family restaurant Brings together organic gourmet food with play elements for children Solution to unmet need in family dining Parents get to eat and relax Kids get an incredible time playing in custom 2500 sq. ft. play area: Climbers Pirate ships Dragons Swings Castles And more OTCQB: GIGL
OTCQB: GIGL Business Basics Three locations in high-profile malls in LA Expanding to 12 company-owned locations by end of 2017 Support from large mall operators Average 75% rent discounts $500K-$700K up-front cash (covers 50%+ of build-out) Interest from franchisees globally Celebrity clientele and national media coverage Strong financial performance Revenue up 48% in 2014 1Q15 vs 1Q14: revenue up 12%; costs down 7% Current assets up 41%; long-term liabilities down 14% at year-end 2014 Multiple revenue drivers generate attractive store-level profitability opportunities OTCQB: GIGL
OTCQB: GIGL Stock Basics Recent Price $0.14 Market Cap $5.2M Shares Outstanding 33.3M Float 15.2M Ave. Volume (3 mth) 22,516 OTCQB: GIGL
OTCQB: GIGL Experienced Senior Leadership 20+ year career on Wall Street Joey Parsi Sutro & Co., Lehman Brothers, & TD Founder & Chief Executive Waterhouse (managed $350M+ in Officer assets) Founded Giggles N’ Hugs in 2007 Former COO of California Pizza Kitchen John Kaufman Grew from two locations to 70+ Interim-President Former President/COO of Koo Koo Roo 33 years of restaurant industry experience Former president & CEO – Grill Concepts, Inc. Philip Gay, CPA Former CFO – California Pizza Kitchen & Chief Business Development Wolfgang Puck Food Officer Former CEO & COO – Diversified Food Group Former CEO – Color Me Mine Managing Director of Triple Enterprises 25+ years of restaurant industry experience OTCQB: GIGL 6
OTCQB: GIGL Experienced Senior Leadership 20+ Years of operations management Sean Richards experience Chief Operating Officer Regional Director at Hootwinc, LLC (operated 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 Joined Giggles N’ Hugs in 2010 Co-founder and former CEO of Gymboree Joan Barnes Grew brand to 400 play centers Advisory Board Sold for $1.8 billion (~20x revenue) Founder of YOGA STUDIO, sold to Yoga Works in late 2008 Joined Giggles N’ Hugs in 2012 OTCQB: GIGL 7
OTCQB: GIGL What Sets Us Apart? Kid-friendly play area in a true restaurant environment Delicious, nutritious, organic menu catered to young children (1-10) and accommodative to parents Activities, every half hour which include, arts and crafts, games, karaoke, character appearances, dance parties and more. 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 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. OTCQB: GIGL
OTCQB: GIGL Celebrity Clientele Jennifer Hudson and son David played at Gwen Stefani and Gavin Rossdale take their Jessica Alba and Cash Warren take their Sarah Michelle Gellar and daughter Giggles N’ Hugs in LA before going on to boys, Kingston and Zuma to Giggles N’ Hugs daughter, Honor to birthday party at Giggles Charlotte love Giggles N' Hugs have an early dinner together. in LA on Sunday, March 6. N' Hugs Century City, November 10 Halle Berry and Nahla at Adam and Sadie Sandler at Ben Affleck taking Violet to Victoria Beckham and Jaime Pressly with son Dezi Giggles N’ Hugs in LA Giggles N’ Hugs Giggles N’ Hugs Harper at Giggles N’ Hugs at Giggles N’ Hugs OTCQB: GIGL
OTCQB: GIGL National Media Coverage OTCQB: GIGL
OTCQB: GIGL Corporate Video Overview OTCQB: GIGL
OTCQB: GIGL Where We Are Today 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 children 21% of household income >$100k Westfield Mall – Century City, CA Westfield Topanga Shopping 10-year lease signed February 2012 Center – Canoga Park, CA Opened end of March 2013 Annual run rate of $1.1 million in sales (up 4.3% YTD) 5,900 sq. ft. 38% of households with children 30% of household income >$100k Glendale Galleria (General 10-year lease signed February 2013 Growth) – Glendale, CA Opened November 2013 Annual run rate of $1.4 million in sales (up 16.9% YTD) 6,000 sq. ft. 47% of households with children 23% of household income >$100k OTCQB: GIGL
OTCQB: GIGL Strategic Expansion Plans: Company-Owned & Franchise Locations Expanding to 12 company-owned locations by year-end 2017 Backfill Southern California market, with longer-term target markets including: San Francisco, CA Seattle, WA Vancouver, BC East Coast OTCQB: GIGL
OTCQB: GIGL Global Franchise Opportunity Growing demand for Giggles N’ Hugs franchise opportunities has been received from large multi-unit franchising operators and small individual franchisees, both domestically and internationally. Upfront Multi-Unit Licensing fees ($100Ks to $millions ) Ongoing Royalties (3%-8% of gross sales) In North America, the Company has received interest from franchise operators from Canada and from nearly every major city in almost every state in the U.S. International demand for Giggles N’ Hugs franchises has already been received from numerous operators in key International Markets Asia Latin America Australia the Middle East Europe OTCQB: GIGL
OTCQB: GIGL Major Mall Operator Support: Rent Concessions & Up-Front Cash Strong interest from major mall operators Westfield Group (55 properties) Macerich Group (62 properties) General Growth Properties (135 properties) Simon Properties (300+ properties) GIGL drives traffic to mall properties; mall owners/operators offering significant concessions & allowances: Average 75% discount on rent $500K-$700K up-front cash (covers 50% of build-out) Todd Star , former Westfield senior executive, spearheading negotiations with mall operators Negotiating deals on per-location basis OTCQB: GIGL
OTCQB: GIGL Licensing & Merchandising Provide Additional Revenue Drivers Agreement with The Licensing Shop (TLS) to extend the Giggles N’ Hugs experience into “on - brand” products TLS specializes in the strategic development of consumer products; expertise includes: Extending brands into licensed products Creating new revenue streams Reaching new customers TLC clients include: Plan to sell branded merchandise in-store as well as to top-tier retail outlets (Nordstrom, Bloomingdales, Whole Foods, etc.) Potential merchandising opportunities:: Organic 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 OTCQB: GIGL
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