uWink Restaurants. - Our near term strategy is open three to six additional company-owned and/or managed restaurants within the next six to twelve months. We estimate that we will have to expend between $1,000,000 and $2,500,000 (net of any landlord tenant improvement allowances) to construct, staff and open each new restaurant, excluding rent. Our build-out cost of new restaurants will vary depending on a number of factors, including the size of the location, whether we are converting an existing restaurant space, as we did with our Woodland Hills location, or moving into a "build to suit" location constructed from a building shell, typically with a monetary contribution (also typically referred to as a tenant improvement allowance) from the landlord. While the latter development model generally involves greater costs (depending on the level of landlord contribution) and time to open (because the permitting process is typically significantly longer), we believe that positioning our restaurants in popular, "marquee" locations (which typically operate on the "build to suit" model) will greatly increase public awareness and recognition of the uWink brand, which we believe is critical to our continued growth. We have recently entered into letters of intent to secure three such sites for new uWink restaurants, at the Promenade at Howard Hughes Center in Los Angeles, at the Hollywood & Highland Center in Hollywood, California, and at Galleria Dallas in Dallas, Texas. Effective June 4, 2007, we and the landlord entered into a definitive lease agreement for the Howard Hughes location. On October 25,
2007, we entered into a definitive agreement to acquire the leasehold interest and certain other assets of a currently operating restaurant in downtown Mountain View, California, which we intend to convert to the uWink concept and open by early 2008. We intend to utilize a mix of these two development models in the near term and to cluster company-owned stores in markets that we enter to achieve operational efficiencies.
Our longer term growth strategy is to open additional company-owned and/or company-managed restaurants in new markets and to franchise our concept, focusing on multiple-unit area development agreements with experienced operators. We are ultimately targeting a mix of one-third company-owned restaurants and two-thirds franchised restaurants. We expect we will also seek to generate additional revenue through the sale of our proprietary tabletop terminals and related software to our franchisees. In addition, we believe that our concept is well suited for specialized locations, including airports and schools, and are pursuing opportunities in these areas.
We are targeting 6,000 to 10,000 square foot locations in high traffic areas as the sites for future restaurants.
uBuy until uSell - uWink, uWait, uWin! - Netman
I base my trading decisions on my own DD, research, evaluation, constant re-evaluation, insight and information. Everyone should do their own DD, and constantly evaluate their own conclusions IMO.
