NEW YORK, NY/ ACCESSWIRE / March 29, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Generation Next Franchise Brands, Inc. (VEND) and raised its target price to $2.85.
March 2018 Update.
We are updating coverage of Generation Next Franchise Brands, Inc. (VEND). Located in San Diego, CA, VEND was founded in 2016 and is the parent company to 1) Fresh Healthy Vending LLC, a leading healthy-choice vending machine franchise, and 2) Reis and Irvy's, Inc., a robotic frozen yogurt vending kiosk. The company also operates 19 Degrees, a corporate-focused frozen yogurt robot brand, and Generation Next Vending Robots, Inc. We see several catalysts ahead for VEND as it prepares for a nationwide rollout of its Froyo Robots, in partnership with manufacturing leader Flex, Inc., which was responsible for manufacturing the first 45,000 Redbox units, as well as Dannon YoCream, Stoelting Food Service, and Pitney Bowes, which will provide national installation and servicing.
Upcoming Rollout of Froyo Robots in April 2018
Through Reis & Irvy's, VEND is seeking to reinvent the frozen yogurt business with its Froyo Robot, a self-serve, frozen yogurt vending machine, which offers seven flavors of frozen yogurt, ice cream, sorbets and gelatos, and up to six custom toppings. The Froyo Robot can serve up to 60 servings per hour and only occupies a 15-foot space. Combining the company's experience in healthy vending with new technology, VEND launched its flagship Reis & Irvy's froyo robots in 2016 and has pre-sold more than 1,000 units representing a $40mn backlog across the United States, Canada, Puerto Rico and the Bahamas.
Bookings Traction Taking Shape as VEND Prepares for Rollout
As highlighted by recent announcements and aggressive sales targets by the company for calendar 2018 and 2019, VEND appears to be gaining traction in the market. Management articulated a goal of surpassing $90mn in revenues in calendar 2018, including $45mn of new franchise sales. Most recently, on March 21, 2018, VEND announced a record $23mn franchise contract for the Los Angeles and Orange County markets. The deal was with local investor and entrepreneur, Nassim Bayat, and includes the purchase of 588 patented automated retail frozen yogurt robots, with exclusive rights to Reis & Irvy's locations throughout Los Angeles and Orange County.
VEND had deferred revenues of $32.7mn on its balance sheet as of December 2017 and reported a backlog of more than $40mn as of March 21, 2018. The company has scheduled a mass rollout to take place beginning in April 2018 with manufacturing partner Flex, Inc., which should be an event that allows it to record revenue. In addition to revenue from new franchise sales, the Froyo Robot business also includes franchise agreements that call for ongoing revenue sharing on gross sales, providing an annuity like future revenue stream on its installed base.
Raising Target to $2.85
We are updating our price target to reflect recent momentum in the business, as disclosed by management in recent announcements and its investor presentation, which calls for robust growth in 2018 and 2019. VEND appears to be gaining traction quickly in the frozen yogurt market with its strategy of emerging as a form of Redbox for frozen yogurt. We will revisit our target and forecast as initial installations proceed.
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