is working (too hard) for a living
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Bikini barista stands exploding, means market share loss in BCCI home market (since Washington kiosk count has stayed the same for at least three years).
Not a good sign, particularly as the kiosks have $0.60 in operating loss for every $1.00 in revenue -- with the two principals taking no salary.
Hopefully the BMOC format innovation will be successful, drawing additional (franchise) investors to that format.
If only one kiosk has expanded product line (beer, cigarettes, etc.) 4.5 months after announcement, this tells me:
- Not profitable; or
- Licensing/permitting is too onerous/expensive -- or unavailable.
Note the one kiosk is one of the two Cape Coral stores, why not both Cape Coral stores (same JV partner)?
You have posted the same Oct 2014 press release on the expanded product line for (at least) two consecutive days; to me, this product line expansion shows some company creativity, but with only one store not a good indicator of future stock value.
But what do I know?
- I wouldn't have thought that the OTCQB listing would increase stock price and it did -- on both announcement and accomplishment.
- I didn't expect the good BMOC news, about pending locations and a revised format, to result in a lower stock price.
Maybe there is more to the profitability of the latter than has been disclosed re: franchise fee, royalty, and marketing fees. BMOC has reportedly committed $25K/month to nationwide advertising for additional franchisees, perhaps those dollars are 'soft' (advertising bought at discounted rates in off-hours) at the expense of 'hard' royalty, marketing and franchise fees.
Should know more about franchising fees when the Q1 financials come out, and franchising/royalty/marketing fees when Q2 results come out.
Meanwhile, posters should be on the lookout for the advertising and advise when seen, with their opinion as to effectiveness (note: the 2015 Inc placement may be part of this commitment, as the 2014 placement was apparently part of the $1.7M in advertising announced Oct 1, 2013).
Ice cream grocery placement was by Caliph Dairies. And, promotional dollars were spent via coupons and discounts.
For K-Cup, neither distributor nor grocery chains have been announced.
I think we can agree that Baristas' grocery store history will not be helpful to them in gaining shelf space for the new product.
Hopefully, meaningful K-cup distribution plans will be announced shortly, together with the cost. Ice cream development, distribution, and initial inventory cost the company 5M shares when pps was double what it is today.
How are you feeling about reality show now?
Sorry, we are talking semantics re: grocery competition.
Absolutely agree that grocery stores are all about shelf space -- getting it and keeping it.
My point is that how you get and keep grocery shelf space, is about brand or price. You need one or the other to get the space, and to keep it, as brand/price drive volume.
If you think it is all about how good or unique the product is, fine -- but there are 16 linear feet of K-cups at my grocery store, and I frankly don't think a brand new (to grocery stores) brand with 'white coffee' is sufficiently unique to gain some of that space.
Time will tell -- hopefully, they try grocery stores first in Seattle, where they have some brand recognition in coffee.
Typo -- 5M shares for Ice Cream distribution.
Go to the following King Kullen website, http://shop.mywebgrocer.com/shop.aspx?strid=7CCF78914 and search on ice cream, you will have the opportunity to select brands from amongst 30+ selections. Unfortunately, Baristas is not one of them.
This suggests to me that KK no longer carries Baristas ice cream.
Worth noting that the Yelp reviewer quoted lives in Arizona, uses Baristas' promotional pictures of the ice cream, and has only had two reviews and an update covering two stores in Greater Seattle plus King Kullen on Long Island. Net, not a lot of credibility at least from my perspective.
We can hope that the negative experience with ice cream has not damaged the Baristas brand with grocery store chains relative to the K-cups; time will tell.
In grocery stores, you compete initially on brand or price. Other than in Greater Seattle, the brand isn't known -- and BCCI volumes will not be sufficiently robust to enable a low price. Will be interesting to see how it plays out.
I personally believe the BMOC work is the most promising for BCCI. Lehr is real, and experienced -- his decision to go with a totally different format, and fund it, is a positive step for the company.
The filings confirm there WERE ice cream activities -- 5M shares of stock were given out to set up franchising. These had a value of $500K at the time. Still 'on the books' as an intangible asset at $125K. Why, don't know.
And, apparently you can buy ice cream at the kiosks, I think you have done that.
But, 2014's BCCI registration statement did not mention ice cream (other than as an intangible asset worth about .004 per share). That is, as BCCI discussed its business, sale of ice cream was not singled out.
Lack of talking about the ice cream business, despite reporting over 200 stores were going to carry it (Gristedes plus another NY area chain), and reduction in book value, leads to the inevitable conclusion that at least financially this is a brand extension which has not worked out.
"Damn with faint praise" is the thought that comes to mind when the Yelp ice cream review quoted is by an individual with only two Yelp reviews -- both about Barista ice cream, six months ago.
And that review was in the greater Seattle area, not in the New York area where hundreds of 'carrying' locations were announced with fanfare two years ago.
There is a reason why the ice cream investment was written down from $500K to $125K when the books were finally audited. And TBH, I was surprised the investment was left on at even that deflated level.
PS. The 'kicker' about the reviewer, is that his profile says he is from Phoenix. So, maybe a long trip to check out that ice cream -- as he didn't review the coffee!!
Two year old press release on ice cream is not real helpful.
Worth noting that ice cream was not even mentioned in the registration statement filed and then amended over the summer.
And, grocery store ice cream sales have never been stated by the company.
Makes me wonder how many grocery stores are carrying it today.
Anyone found any lately?
Two year old press release on ice cream is not real helpful.
Worth noting that ice cream was not even mentioned in the registration statement filed and then amended over the summer.
And, grocery store ice cream sales have never been stated by the company.
Makes me wonder how many grocery stores are carrying it today.
Anyone found any lately?
K-cup distribution is NOT announced -- names of grocery chains, etc.
There are a lot of k-cups on the shelves today -- in fact at my chain, I found Barista Prima Coffeehouse, so there may be some brand confusion.
And, there are two pieces to distribution -- getting it, then keeping it. See ice cream post to follow this one.
RSP, you have published the October, 2014 BCCI PR about beer, cigarettes, etc. several times. Always good to have additional revenue sources, if the margins are worth the cost of inventory, etc.
Do you know how many BCCI kiosks are selling beer and cigarettes? All of the ones in Florida? Or Washington? Or the one in Montana? I suspect there are permitting/licensing cost considerations which may not make such sales economic in all locations.
NASDAQ uplisting has financial requirements.
Unfortunately, BCCI has a long way to go to meet those requirements.
The most difficult one for BCCI will be shareholder equity. To meet that requirement, company needs to generate significant profits (Q3 14 financials show BCCI losing $0.60 from operations for every $1.00 in revenue, plus $0.30 in interest expense).
Franchise fees will help, as will royalties. Q1 financials should show the level of franchise fees received in the first quarter. But, it sounds as though the company intends to reinvest those funds in K-cup development and distribution, as well as other branded products to be resold by BMOC -- so the necessary profits to build shareholder equity are likely some years away.
An alternative would be to sell equity -- but that would mean significant dilution, as shares sold by the company over the last few years have been at a significant discount to traded pps. However, if the shares rise due to a significant improvement in operating results, rather than temporary 'March Madness,' perhaps equity could be raised at a reasonable cost.
You refer to the uplisting 'process,' BUT worth listing the uplisting requirements, so investors can assess the immediacy.
Foreshadowing: Not very.
Take a look at page 9 of the initial listing requirements document: https://listingcenter.nasdaq.com/assets/initialguide.pdf
The key problem is the stockholder equity line. The company's stockholder equity in its most recent financial report is 2.3M, and the requirement is $5M -- but the company has been losing significant money, so near term ability to uplist would imply an equity sale which would mean significant dilution, particularly as the company's recent equity sales -- for many fewer shares -- have been at below pps prices.
The price per share problem could be solved by a reverse split, and the company is hovering around the $15M market cap requirement. A turn to profitability would undoubtedly solve the market cap as price would go up.
We'll see if BMOC opens kiosks. No so far.
Have you actually seen the Inc magazine article? A year ago, there was a similar claim, and it turned out to be an advertising supplement. If it is a real article, would be worth posting a link.
No BCCI association with prostitution arrest other than geographic proximity, totally agree.
One poster said controversy is 'helpful' to a company, you concurred.
My point is that controversy is not helpful in a franchising business if it creates a perceived risk of difficulty of getting, or holding, an operating permit -- and I used the prostitution arrests in a competing baristas coffee business as an example of my point.
Do you honestly think that kind of controversy helps??
The risk is that the Barista's kiosk drive-through model is is an unsupervised business, a couple of girls in a kiosk. 'Town fathers' might well not want to offer permits -- and/or 'rogue' employees could mess things up in a business with nominal operating margins (BCCI had $0.60 in operating LOSSES for every $1.00 in revenue in Q3 2014 with no management salaries, and this was AFTER closing three non-performing locations).
So why take the risk if you are a franchisee?
That is why I like the mall model with a broader menu; tone down the costumes and include male employees as well. Worth trying!
Certainly, after years of opening and closing kiosks with negative margins, and afer a HUGE franchisee push a year ago with the prior Inc magazine placement and other similar placements produced not a single new kiosk in a year (and, one promised for opening did not), the kiosk model did not seem to have growth prospects.
San Antonio picture not helpful, TX locations closed
Cubic Asset Management's $500 (10K shares) less impressive, wonder why this $315 million dollar institution bothered?
Perhaps they will add to it based on the pending 10-K.
Worth noting that Harvest Capital Management held its BCCI position before the recent OTCQB qualification.
What will be instructive is the number of new institutions added to the ownership roster during the current quarter -- although most will likely hold off until the 10-K is filed in April.
Would be interesting to know what stimulated the interest of Harvest Capital, holders of $200M in positions, to invest $10K in BCCI in Q4 2014, when its next smallest of 83 total positions is twenty times that size ($200K).
But hard not to argue it is a good sign.
While there is an argument that all publicity is good publicity, controversy is not helpful to a franchising business model if it increases perceived risk in getting, and keeping, operating permits due to bad acts by those with a similar value proposition.
Consider the recent arrest for prostitution of the owner of a multiple location Seattle area drive thru kiosk business featuring scantily clad baristas.
Hard to see how this 'controversy' is viewed as positive by potential BCCI franchisees.
Worth documenting, if possible, BMOC terms re: royalties and marketing fees -- which I did reference in one of my posts as being of potential significant value.
You did quote from the BMOC agreement in a recent post -- but that was from the agreement which was announced as terminated in November in the amended registration statement. Would be great if the company would file the new agreement -- though not sure they a required to. But would sure remove uncertainty, so would increase pps.
You titled your post $25K received, yet the PR could be read as $75K (3 x $25K). Once Q1 financials are out, we will see what they say.
Your point about .40 pps is irrelevant -- the real number of merit is market value (shares O/S times pps). There, the discrepancy may be even greater, don't know.
For BCCI, investors have to decide if it is worth $15M; I was surprised that the share status change to OTCQB had much more pps impact than the BMOC announcement, which for me was much more important -- and positive -- for the company's future.
Rookie, looks like you are in SW FL.
Any knowledge about why the third SW FL store, announced a year ago for Q2 14 opening, didn't?
Links to Q2/Q3, plus amended registration statement?
Great that there are finally audited statements this year, even if the result was complete restatement of 2013 (sales lower than originally reported, and profits turned into losses; indeed, 2013 loss was about equal to revenues).
Revenues continue to decline year over year in Q2/Q3, reportedly due to three store closings in Q4 2013. Of more concern is the operating margin line -- worse with sequential 2014 quarters; Q3 shows an operating loss of $0.60 for every $1.00 of revenue, with interest expense at an additional $0.30 per dollar of revenue.
Good that the company is receiving franchise fees to offset the cash losses in the current core business, currently being covered by stock issuance (preferred stock convertible to common, forgotten by those posting A/S information) -- it would be great if the company would confirm the $25K franchise fee to BCCI for future locations, plus 6% royalty and 1% marketing fee to BCCI on all BMOC franchise openings, and BMOC's prior commitment for $25K/month in advertising.
If that would all be confirmed, I think this stock could run.
Please advise source of $25K/month advertising commitment.
Was part of the initial BMOC agreement, but that agreement was announced as 'dead' in November.
Would definitely be valuable for BCCI to publish the terms of the new agreement, including such things as franchise fees, royalty and marketing percentages, advertising commit, and other financial/support components.
Nice work on job application.
Looks like this location will be different than typical Barista's location -- I would bet male baristas, in addition to the new menu items. If so, more chance of success!!
I read documentation, don't predict the future.
For sure, good news for BCCI that the BMOC deal has been resurrected.
I do like the idea of a new format, much as I liked the sports bar.
However, I am skeptical as to whether an in-mall solution will be financially successful -- fortunately, BMOC is taking the financial risk (assuming previously announced provisions of franchise agreements remain in place). Hope it works out, since in addition to the $25K/unit franchise fee (if that applies to mall locations), BCCI receives 7% in royalty and marketing fees.
Given this announcement -- would be interesting to know who invested $80K in a buy order last Friday....
Is the DuBois mall store opening for real?
Strange to see hiring for store openings which have not been announced -- the company traditionally announces openings well in advance of the planned date, so much so that several 'announced' openings never happened. Perhaps they are changing their model to only announce an opening when it actually happens -- would be refreshing.
But, it and the other two PA locations being 'advertised' have nothing to do with the eight state BMOC franchising agreement, as that was cancelled.
What about the store itself?
- The Baristas model seems to be heavily built on men driving up for coffee on their way to work in the morning. Debate?
- The DuBois mall doesn't even open until 10am. Coffee purchase likely requires a man to drive to a mall, walk-in, and buy coffee from a costumed young lady in front of women and children (the primary visitors to malls), in their 'home' community. I don't think sales volumes will be high -- and mall space is notoriously expensive.
Prospective baristas are directed to the company's website to apply 'online' -- but the PA locations are not even listed! (However, the closed locations in AZ are listed, so maybe this is not a good indicator.)
I personally think that someone is impersonating BCCI -- I can't believe they would open a mall location, particularly in a brand new geographic area (caveat: two other PA locations are 'advertising' for new hires).
Thoughts about franchise brochure, and BCCI franchise economics:
--- First, great that they have one.
--- But, 'attention to detail' a bit lacking:
- 'consumedper day,' instead of 'consumed per day'
- 'Turn Key' instead of 'Turnkey'
- 'Franchise provides' instead of 'Franchisee provides'
--- More substantively:
- 'financing assistance' missing from services provided. I can understand no company financing, but one would hope that BCCI could find third party financing. Though, maybe not a surprise -- they obviously have been unable to finance more of their own stores, even in Seattle/Tacoma, so they are losing market share (since they say this is a growing market).
- I don't understand the 'minimum investment' $50K. The franchise fee is $25K, and start-up costs are $100K (per the 2012 sponsored Prime Equity Research report).
--- Most importantly, prospective franchisees will look for economic proof points.
The company's Q3 financials show operating losses of $0.60 on each $1.00 of revenue -- and that's with BCCI management taking $0 in salaries. Franchisees will also have 6% royalty and 1% marketing fee on top of the expenses company-owned stores incur.
A few comments about franchising history.
- In March of 2014, Baristas was touted as "Most Exciting New Franchise" in an advertising supplement in Inc. Magazine.
Since then, only a single franchise agreement was announced as signed, in May 2014, with BMOC -- for 8 states!! Unfortunately, per page 4 of the Amended Registration Statement FORM 10-12G/A filed Nov 13, 2014, that agreement was terminated.
However, there is an excuse for those thinking otherwise -- elsewhere in that same document, and the Q3 financials published a week LATER (???), the need to finance the agreement's activities was also discussed.
- Perhaps the new listing will have a more positive outcome.
However, it is worth noting that SW FL is the closest thing the company has to a franchise operation today -- a joint venture with a significant third party investor. Almost a year ago, a third store was announced to open in 'early Q2,' but so far it hasn't happened.
Cash cow? Which end of the cow?
Q3 14 had $0.60 of operating loss for every $1 of operating revenue, plus $0.30 of interest expense.
Not obvious they can afford to open new stores, in the last 18 months they have closed three.
In Feb 14 they announced another SW FL location to open in Q2 14, but it has yet to happen. Maybe they just got the year wrong....
Certification question e and response interesting, may explain why the company waited until 2015 to post the Certification.
Specifically, BCCI says that there were no "third party providers...engaged by the Company, its officers...during the period from the Company's prior fiscal year end to the date of this (emphasis added) ... Certification, to provide investor relations services, public relations services, or other related services to the Company including promotion of the Company or its securities."
Those who have been here for at least a year will certainly remember the flurry of PR last spring related to franchising, growth opportunity, etc. -- certainly no-one believes that the recognition from multiple publications evolved organically.
And unfortunately, the PR flurry wasn't effective, with no franchising agreements since then (except the one announced in May which was subsequently 'undone').
Requirements for uplisting to OTCQB are pretty benign, as I read the 'fact sheet' seen via click through here:
http://www.otcmarkets.com/marketplaces/otcqb
Seems like just have to be sec reporting (which they now are, I believe), have price over .01/share, pay fees ($2.5K application fee plus $10K/year), and post a certification of various items on the otcmarkets.com website.
Looking at the otcmarkets.com website, we see they are current with SEC reporting, but two most recent quarterly reports are not shown, and I could not find the requisite certification (perhaps someone else can).
Hard to understand why they would announce planned upgrade to OTCQB and then not do the things required. I know, they have previously announced plans to upgrade to a 'senior exchange,' but in those cases it was clear to a knowledgeable investor that they did not meet the requirements. In this case, seems they should be able to meet them.
Wonder how those who bought the big run up the day of/following the announced plan to upgrade to OTCQB, feel about the lack of follow through.
Thanks for sharing; IMO much better than loudmouthnews.com
Tx for link, I should have found.
The good news is the company is reporting -- bad news is, not very active; when the subsequent events section for a 9/30/2014 report refers to events in 2009 and 2010.
Worse news, company looks basically bk, with liabilities at $1M and 4:1 on assets, and no revenues. Company has been doing a lot of debt to equity conversions, but needs a lot more.
Looks like stock price, like BCCI, is 'generous' relative to business prospects.
Interesting with 2 'episodes' of the 'weekly' loudmouthnews radio show since announcement on Nov 19, kind of like the single 'Grounded in Seattle' 'pilot.'
Newcomer here.
- Are there any company published financials, if so could someone please post a link?
- I liked the looks of the loudmouthnews.com website (notwithstanding the negative comments here, and not knowing competitive sources for the same aggregation of marijuana industry news), though I noticed RLTR said it would be a source of advertising revenue, and I only saw a single advertisement.
- The radio show was announced on November 19 as 'weekly,' but the website only shows two 'episodes.' Have there been others?
Interesting that there have been no stock market transactions since the website was announced.
Most people would NOT agree that an infomercial which showed once on a Saturday morning at 0630 on a women's network -- and was not even on the network's visible schedule -- is the reality show promised by Mr. Henthorn.
Limited advertising is a business model problem.
Two CC locations opened in the Fall of 2013 with significant marketing support as you note, some of it likely 'funded' by the Oct 1 2013 deal to exchange stock for advertising. I am guessing the resultant enthusiasm caused the JV partner to plan a third store -- and if I read the financials correctly (and I could have it wrong), have equipment bought for that store.
I am guessing that as initial advertising dried up -- insufficient margins to spend on ongoing advertising -- so did revenues and the JV partner's enthusiasm. Although, could also be that the JV partner had separate calls on his financial resources, or found superior investments.
Investors have never been told why that store didn't open, nor have they been told why stores announced for NJ (1 announced) and AZ (five announced, two opened and then closed) did not open. But, not many companies do explain such situations.
A placeholder for the third SW FL store remains on the BCCI website, suggesting either optimism or a lack of ongoing website maintenance, take your choice.
With respect to ice cream, I'll provide data, you can decide if success or failure:
- 5M shares were issued to set up distribution, or $500K worth at the time of issuance in Q2 2012. Ice cream was on the Q3 14 balance sheet as an 'intangible asset' at $125K.
- The company has never published its ice cream revenues number, which I would have expected had they been significant -- and they could have been, given the announced 200+ stores in which it was initially distributed in the NY metroplex.
- Ice cream is not mentioned in the company's 2014 registration statement.
Any insights as to why the operator of the two Cape Coral kiosks did not open the third one in Q2 14, as promised in a BCCI PR in Jan 14?
Long term investors need to see a successful business model; right now, despite BCCI's assertion of drive through expresso stands as a growing market, investors only have evidence of a company closing stores (two opened -- in Cape Coral -- and five closed over the last 18 months, if my arithmetic is right) and experiencing $0.63 in operating losses for every $1.00 in revenue -- with $0.30 in interest expense to add insult to injury.
Add to that a failed expansion foray (sports bar and 8 state master franchise agreement reported, but then canceled), a failed reality show, and failed ice cream -- there is certainly evidence of business development efforts, but not successful ones.