American Restaurant Concepts, Inc. Discusses Wing Nutz Transaction
LAFAYETTE, La., March 3, 2014 /PRNewswire/ -- American Restaurant Concepts, Inc. (OTCBB: ANPZ), operator and franchisor of the award-winning Dick's Wings & Grill® restaurants, provided additional information about its recent acquisition of a 50% interest in Wing Nutz®.
As previously reported, the Company acquired a 50% ownership interest in Paradise on Wings Franchise Group, LLC, which is the franchisor of the Wing Nutz restaurants and owner of the Wing Nutz intellectual property. As the franchisor of Wing Nutz, Paradise on Wings receives royalties on all revenue generated by the Wing Nutz franchisees, and receives a franchisee fee each time an agreement is entered for the opening of a new Wing Nutz restaurant. Because Paradise on Wings incurs minimal expenses, it is very profitable, with virtually all of its revenue flowing through to net income.
On a going forward basis, 50% of Paradise on Wings' net income will be recorded as investment income on the Company's books, and the Company will receive 50% of any distributions of cash that are made by Paradise on Wings. The value of the Company's 50% interest is also expected to grow over time as the Wing Nutz franchise grows.
Paradise on Wings generated approximately $268,000 in royalty fees from its franchisees during 2013, and expects to generate approximately $300,000 in royalty fees from its franchisees during 2014. It also expects to generate at least $100,000 in franchisee fees from new restaurants that are currently in the pipeline, bringing total estimated 2014 revenue and net income to at least $400,000. If these projected numbers are realized, the Company will record investment income of approximately $200,000 during 2014 from its ownership interest in Paradise on Wings.
"Paradise on Wings is very profitable, making this transaction accretive to our earnings," stated Richard W. Akam, CEO of American Restaurant Concepts, Inc. "In addition, the Wing Nutz franchise is in the process of undergoing significant growth. With several new restaurants in the pipeline, we expect the income and funds that we will receive from Paradise on Wings to grow significantly from currently levels during the next 12 months. This will provide us with a continuous and reliable source of cash flows and strengthen our financial results."
Akam added, "Strategically, this investment expands our reach both in terms of product offering and geographic area. It also enables American Restaurant Concepts and Paradise on Wings to work together as strategic partners to improve the success of each of our respective businesses. We will be able to share ideas, investment opportunities and business connections, all of which will serve to strengthen our product offering and value proposition. We will continue to provide investors with updates on our partnership with Wing Nutz."
About Paradise on Wings Franchise Group, LLC
Paradise on Wings Franchise Group, LLC, headquartered in Salt Lake City, Utah, is the franchisor of the Wing Nutz restaurants. Wing Nutz offers a large selection of premium, never frozen, always baked chicken wings, tenders, boneless wings, hog wings, wraps, salads, nachos, sandwiches, sides and quesadillas. With more than 18 custom sauces and its own line of crafted beers, Wing Nutz provides its customers with a truly exciting, family-friendly sports dining experience. The company currently has 10 locations in Utah and one location in Idaho, with several additional locations about to open and in the pipeline. For more information, please visit the company's website at www.bakedwingsarebetter.com.
About American Restaurant Concepts, Inc.
American Restaurant Concepts, Inc., headquartered in Lafayette, Louisiana, is the operator and franchisor of the Dick's Wings & Grill® full-service restaurants and Dick's Wings Express® express restaurants. The Company prides itself on its award-winning chicken wings, for which it boasts 365 mouth-watering flavors. It offers customers the freshest wings, sandwiches, burgers, wraps, salads and signature waffle fries, all in a unique setting that combines a family-friendly environment with a sports-themed restaurant. The Company currently has 15 full-service restaurants and one express restaurant. For more information, please visit the Company's website at www.dickswingsandgrill.com.
Safe Harbor Provision
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the Company's future financial position, business strategy, plans and objectives, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation thereon or similar terminology or expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from results proposed in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, those factors set forth in the Company's Annual Report on Form 10-K for the year ended December 30, 2012 and its other filings and submissions with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
SOURCE American Restaurant Concepts, Inc.