NEW YORK, NY / ACCESSWIRE / March 27, 2017 / 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. (OTCQB: VEND).
The report is available here: VEND Update Note.
We are updating our coverage of Generation Next Franchise Brands, Inc. (OTCQB: VEND), formerly Fresh Healthy Vending International, Inc. to reflect the company's current focus on its venture into the frozen yogurt market following the new formation of its subsidiaries Reis and Irvy's Inc. ("Reis & Irvy's"), 19 Degrees, Inc., and Generation Next Vending Robots, Inc. Through Reis & Irvy's, VEND is seeking to reinvent the frozen yogurt business with its Froyo Robot, a self-serve, frozen yogurt vending machine. Combining the company's experience in healthy vending with new technology, VEND appears to be gaining traction in the market, with a backlog of $16.5mn in deferred revenue related to Froyo Robot at the end of FY2Q17 and $5.5mn of bookings during FY2Q17. The new price target for the company reflects bookings momentum and increased margin expectations. With headquarters in San Diego, CA, VEND is a pioneer in the area of healthy vending machines. The company is the parent to Fresh Healthy Vending LLC, a healthy-choice vending machine franchise dedicated to making healthy snacks, drinks and fresh foods affordable and available through vending machines.
Investment highlights from the report include:
New focus on frozen yogurt market
Since we initiated coverage on the company, VEND has extended its presence into the frozen yogurt market via new subsidiaries led by the brand Reis and Irvy's, a franchise-focused frozen yogurt kiosk brand. Through Reis & Irvy's, VEND is seeking to reinvent the frozen yogurt business with its Froyo Robot, a self-serve, frozen yogurt vending machine that can produce and serve up to 60 servings in an hour in a 12-foot space. Reis & Irvy currently offers 82 possible flavor combinations and offer a choice of six toppings. Combining the company's experience in healthy vending with this new technology, VEND is aggressively pursuing growth by franchising Reis & Irvy's robotic vending machines. The company appears to be gaining traction in the market, with a backlog of $16.5mn in deferred revenue related to Froyo Robot bookings at the end of FY2Q17, and franchise agreements that call for ongoing sharing on gross sales, with a royalty rate of 12% on all revenues from franchisee robots. This should provide an annuity like future revenue stream from its installed base.
Encouraging development partner, patent position
While VEND aggressively pursues sales efforts to grow its franchise base for Reis & Irvy's, the company has engaged San Antonio-based Lancer Corporation as their exclusive development partner for its Froyo Robots. VEND expects to make delivery and installation on initial orders in this calendar year, with aggressive manufacturing and distribution goals in place FY2018 (ending June 2018). We expect VEND to focus initially on building a franchise base, with follow-on actions to build a network of company-owned machines in future years. VEND has also established an intellectual property (IP) position intended to support the technology for its Froyo Robots; the company cited several patents held by subsidiary Generation Next Vending Robots, Inc. In a press release issued by the company, VEND also indicated that it may pursue additional robotic vending applications after frozen yogurt. If the company's patents and intellectual property do support this, it clearly has the potential to add value to the business.
Raising target to $1.50
We are updating our price target to reflect recent momentum in the business, as disclosed by management in recent quarterly results. 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 future results come in and the company heads towards FY18, when initial installations are expected.
Please review important disclosures on our website at www.seethruequity.com.
About Generation NEXT Franchise Brands
Generation NEXT Franchise Brands, based in San Diego, California, is a publicly traded company on the OTC Markets trading under the symbol: VEND. Generation NEXT Franchise Brands is parent company to Fresh Healthy Vending LLC, the market's leading healthy-choice vending machine franchise, Reis and Irvy's, Inc., the world's first robotic frozen yogurt vending kiosk, 19 Degrees, a corporate-focused frozen yogurt kiosk brand and Generation NEXT Vending Robots, our newly established owner/operator model. The Company hosts over 350 active franchisees throughout the United States, Canada, Puerto Rico and the Bahamas, and continually looks to partner with like-minded entrepreneurs who share its vision. www.Gennextbrands.com.
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Contact:
Ajay Tandon
SeeThruEquity
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SOURCE: SeeThruEquity