InvestorsHub Logo
Followers 31
Posts 3557
Boards Moderated 0
Alias Born 07/28/2007

Re: surfsup10 post# 17141

Wednesday, 07/09/2008 7:30:19 PM

Wednesday, July 09, 2008 7:30:19 PM

Post# of 19383
I don't think the economy is a driver and I would not agree that franchises are being put on hold. uWink is just being patient. The economy is just a factor we all have to put up with.

What I do see is Nolan making a strategic choice about what he wants to do. There is nothing more annoying than a manager that says that he/she simply wants to do "everything". That is easy and sounds ridiculously positive. If he intends to expand by franchise/licensing he simply does not need to open more restaurants, that is all. If he intends to make money in other ways, it will not help him to open more corporate restaurants. After all, on of his KSFs is that his customers have the money to spend. His places are in two of the richest places in the world. If he can't make it there, he can't make it anywhere, so he intends to test his strength and go for the franchising/licensing. If he did build more corporate stores, that would cost money he is short on.

The way he spends that money would be different as well. If he wants to sell technology, he may hire salesmen to sell his wares. The existing shops would be great showrooms as well as showcases. It would probably differ from most franchise operations, where there is a pretty well-defined package the franchisee buys, including signage, lots of things, uniforms.. and of course the food. I know that every McDonalds is supposed to be the same everywhere, and the food is supposed to taste exactly the same. Not the case here. Not the nature of technology either. One uWink customer may want the POS order-entry technology, but not the gaming. There would probably be a core package that is mainly branding with different options in terms of technology, with both database and client (based on number of seats) options. You may not see uWink restaurants, but uWink branding on technology.

Software companies make their money in 3 main streams;

- licensing
- services
- maintenance

Licensing is big money. That is what he is after. Maintenance follows, as upgrades and add-ons follow. Maintenance is also easy money if all goes well. uWink won't be there for a number of years.

Companies either do services or they don't, usually at the expense of license revenue. uWink is a product-oriented licensing company. They will charge for services rendered, but that will not be their focus.

I am not sure if he will be successful, but I am glad he is making a choice.

One last note, if you have come this far, I actually interpreted Nolan's email addy from a message I got from I believe Nancy Nino. He returned my email. Did not have much to say, just restated that he was emphasizing licensing. I promised not to let on we were in contact.. but I guess the cat is out of the bag now....