There’s nothing funny about this company’s serious growth, but I have to laugh (in a good way) about one of the footnotes from today’s Spicy Pickle (OTCBB: SPKL) news release. The announcement is more of the same…new franchisees are signing multi-store commitments. This time the agreement was for three stores in the Los Angeles area. They will be the first Spicy Pickles in the area, though I doubt the last. That’s not the big deal though…
Remember what I was saying about Spicy Pickle not just attracting a lot of franchisees, but a lot of high-caliber franchisees? Experienced restaurant veterans (with plenty of financial backing) are getting on board. Take for instance the group that made a ten store agreement for the western Michigan area. They’ve opened restaurants before, but committed to ten Spicy Pickles before they even got their first Pickle up and running. In fact, we’ve seen a lot of ‘site-unseen’ commitments like that one.
However, I think today’s news outdid all the rest. The new L.A. franchisee is also an instructor at the culinary school in Pasadena.
I don’t know the guy from a hole in the ground, but being an instructor at a culinary school, I think it’s safe to assume he’s picky about his food….what he eats, and what he sells. I’m also going to assume he’s seen enough good and bad restaurants to know what’s worth getting involved in. For him – of all people – to pick Spicy Pickle? What else do I need to say?
Anyway, by my count this brings the total number of restaurants up to 113…36 in operation, and 77 more on the way.
The number may seem like just a number, but what the market may have forgotten is this company’s progressive march towards profitability. Remember the company’s burn rate of about $200K per month? On average, each store contributes a little over $4000 to the company’s top line. Do the math here…36 stores multiplied by $4000 equals $144K per month, and I think that’s a somewhat conservative estimate. The point is, Spicy Pickle continues to walk towards an operating profit. With 77 more units on the way, I don’t think it will take much longer to get over that hump.