News

UFood Grill shareholder letter highlights milestones

November 10, 2010

UFood Restaurant Group Inc. chairman and CEO George A. Naddaff has sent a letter to shareholders highlighting the restaurant chain's milestones and achievements for the year.

Naddaff said that despite job losses in 2009, the restaurant industry still outperformed the national economy.

For the past year, Naddaff said the concept "has focused on its core business, and made significant achievements in overall operations and secured relationships that we expect to prove beneficial in expanding our brand."

The company closed on approximately $3.4 million in Series B funding and additionally converted a major portion of its Senior Secured Convertible Debt into shares of Series A Preferred Shares. Also, the company's general and administrative cash expenses have been reduced by approximately $760,000.

"We are now a 'lean and mean' operation that consists of highly qualified experienced foodservice professionals who have collectively over 240 years of restaurant experience," Naddaff said in the letter.

"We redesigned all our stores to the UFood concept as well as re-engineered our menu, adding new items while deleting less popular items. In addition, we are lowering prices where possible resulting in significant unit sales improvements among existing locations and reducing the expense required to operate a new unit with a great tasting proven menu.

"The current strategy has been to open units in non-traditional but high consumer traffic areas, such as; airports, travel plazas, hospitals, military bases and colleges. These are venues that will expose the UFood Grill brand to millions of consumers and support our growth plan for traditional stores in major U.S. markets."

Additionally, the company has executed franchise agreements with five corporations to expand UFood Grill to more than 50 non-traditional locations. In addition to existing airport locations, the company also has opened new units at Cleveland Airport, Boston Logan Terminal C and Parkland Hospital in Dallas.

"After several years of tightening credit markets impacting business growth, financing sources for franchise prospects seem to be loosening throughout the country. ...We have made application with the Small Business Administration's Franchise Registry which streamlines many of the financial steps a franchisee must take in order to obtain financing to open a UFood Grill unit. Another goal is to reduce our per unit capital costs by $150,000, or more. This would make the UFood Grill concept more attractive to franchise prospects.

"The foundation of our concept is based on the epidemic of obesity, diabetes, heart disease, cancer and other consequences caused by poor nutrition and unhealthy eating habits in our country. Recognizing this, the Company has entered into a cause marketing partnership with HealthCorps, Inc., a New York-based national non-profit organization founded by heart surgeon and Daytime Emmy award-winning talk show host, Dr. Mehmet Oz. UFood Grill is also associated with Healthy Dining, an outside company endorsed by the National Restaurant Association which provides nutritional analysis for all our menu items thereby providing third party confirmation and credibility.

"Our goal remains to create value for our shareholders as well as to bring a healthier meal alternative to the American consumer. I am proud of our staff and franchisees. I can assure you that our team is working diligently in our goal to grow the Company and continue to earn the confidence of our shareholders. We will continue to build and open one successful UFood Grill restaurant at a time."