My most positive view of uWink. Greenband, I am interested in your opinion on this.
I do see how uWink could be successful as a sales-driven organization. In fact, it plays to their strengths. First of all, remember, their target market has changed. It is no longer women 21-35 year olds. It is the restaurant market across the US, and possible California initially. They are no longer a restaurant chain, they are a software vendor.
What are their competitive advantages:
1. they have no debt. Therefore they cannot possible go bankrupt, no matter what. There are no creditors to go after them., ergo no need for protection. The worst they can do is be insolvent (unable to pay their bills).
2. Multiple revenue streams.. ie. those revenue-producing restaurants. Not many vendors can claim that.
3. The ability to mount an effective sales demonstration without any props or the need to travel.
OK, so they cannot afford a big-buck sales force. Well, the next tier of sales is a dealer network. Many blue-chip companies have abandoned an in-house sales force because of cos t reasons and gone with a dealer network. Nortel, for instance. I worked for a few Nortel dealers during this last recession. This is the "boiler-room" environment I was talking about. Large sales staffs on zero-base schemes. The pick of the crop rise to the top in a competitive hungry environment. The fat cats running the show get all of the leads. The strongest survive. Not exactly ideal, as the sales techniques deployed and the knowledge of the sales people does not tend to give the product credit, in fact it can harm the product's reputation. Cold-calling aggressive techniques are deployed. However, it could work. Key thing; no one is spending any money until a deal gets done. uWInk could provide training courses in LA for dealer reps. That would be the extent of their involvement and cost. We could see lots of these types of announcements.. I would classify them as meaningful to the stock price maybe in a temporary way. Not long-term. Look for money changing hands for something meaningful.
Example of that is the Florida deal. An area Development Agreement is the same thing applied to franchising. When I read the document it seemed powerful, as there was an implementation schedule and money down. How did it turn out? Money in escrow was refunded and nothing happened.. not meaningful.
There is another kind of sales position called "Inside Sales". It is a fancy term for a telephone salesman. uWink would do well to hire a team of such people and deploy them. They would need someone to finalize the pricing, come up with a pitch..and train the sales force. They would be more knowledgeable than dealers. Inside Sales people make about 50k base and maybe 100k max.
What do I see as the advantages of this? They could offer packages involving trips to LA. There is lots to do/see in LA, great for entertaining. Instead of getting meetings, doing demos.. etc, just pitch to come to LA. Pay for the ticket and hotel stays.. Host a restauranteurs convention...
They could do well even locally for an odd reason. There has been talk of the labor-saving cost advantage to buying uWink. Well, what about labor availability? It is well-known (correct me if I am wrong), that there is a labor shortage in California, and especially in Silicon Valley. So it is not a matter of saving money, it is the lack of people in these rich areas that are willing to do that kind of menial labor. I would imagine that it is not minimum wage, simply for that same reason. That magnifies the cost advantage to the customer. So, uWink would do well in the Silicon Valley area.. or this reason alone.
Apparently it is difficult to find people to pump gas there.. (I know I would always have something to do.. lol.. baaa haaaa).
Anyway, I see this working for them. I have not seen the kind of changes necessary to get them there, and I think those changed will drive the stock down further.. to the .10-20 level. The only reason why it can't go lower is the fact that they have no debt... it can only go so low. Companies that are in danger of bankruptcy go down to sub - .10.
Speaking of which, that is my .02.
