SPoT Coffee (Canada) Ltd.
TSX VENTURE : SPP

SPoT Coffee (Canada) Ltd.

February 05, 2014 09:03 ET

SPoT Adopts Franchise Business Model for Its Ongoing Growth

TORONTO, ONTARIO--(Marketwired - Feb. 5, 2014) - SPOT COFFEE (CANADA) LTD. (TSX VENTURE:SPP) ("SPoT" or the "Company") is pleased to announce that it is completing its platform of 12 cafés upon which it intends to build a franchise business model for its unique and profitable cafés in the State of New York. Accordingly, SPoT's management has retained the N.Y. legal firm of Harris Beach, LLP, to prepare the franchise documents needed for the N.Y. franchise license application. SPoT intends to launch its franchise program with the franchising of four (4) of its existing and operating corporate owned cafés in Upstate New York. The Company further intends to manage and retain ownership of three (3) corporate owned and operating cafés in the Buffalo area and Toronto which it will be using to train café managers and employees as well as to test new menu offerings and in-store retail products. The Company will also retain its 60% ownership of Spot Orchard Park, Spot Hertel and Spot Saratoga Springs which it will continue to manage and operate under its partnership agreements. The Company will keep managing its two fully licensed cafés in Del Ray Beach (now, operating) and South Miami (presently, under construction), Florida.

SPoT's management has decided to adopt the franchise business model at this time because it has now completed the development of the necessary infrastructure upon which it can build a successful franchise program. This infrastructure includes, among other things, successful and streamlined café operations, training manuals and operating and reporting systems. This franchise program will accelerate the development of new cafés as well as build and grow the SPoT Coffee brand in the regional market of the State of N.Y. The Spot franchise model is designed around the distinguishing design and economic features of a Spot café that attribute to its successful operation. SPoT feels confident that it can duplicate this success throughout its franchise but to the duplication of such success as well among various communities and their neighbourhoods in Upstate N.Y.

The Company has started interviewing candidates for the position of senior vice president of franchise operations with the proper qualifications to ensure the smooth and timely implementation of its franchise program.

Under the franchise model, the franchisees will be providing the required cash and financing for the development of new cafés starting with the franchising of its above-mentioned existing corporate owned cafés proceeds of which will be applied by the Company to support the development and roll-out of its franchise program notwithstanding the enhancement and up-grading of its coffee roasting, food preparation facilities, distribution and other supply centers to support an efficient and responsible franchise program.

SPoT's management firmly believes that the franchise business model will minimize share dilution and enhance shareholder value. It will further provide a rapid rate of growth with comparatively lower operating costs than those associated with the management of corporate owned cafés. The Company's revenue from franchise fees, royalties, distribution of coffee, coffee related products, signature prepared foods and other SPoT quality products and systems that the Company has been carefully and successfully developing and will continue to develop and enhance over time will be sustainable and growing with the growth of the Company's franchise business.

SPoT's management has been working diligently to obtain its N.Y. franchise license and anticipates the completion and launch of its franchise program within the next 4- 6 months depending on the legal processing and release of its franchise license. However, the Company will be periodically informing the shareholders through news releases with up-dates on the progress of its franchise program as well as any other business developments.

Mr. Anton Ayoub, president of the Company, stated: "We have been working very hard to prepare for the much anticipated launch of our franchise business model. We strongly believe that this model is best suited for our publicly listed Company in that it provides the attributes needed for rapid growth, sustainable increase of profitable revenue, minimum dilution of share value, as well as the rewarding opportunity of sharing this growth and success with our future franchisees in the building of community cafés under the banner of SPoT's brand that is dedicated to quality throughout for the service of our growing communities and their surrounding neighbourhoods starting this year in the State of N.Y. and from there, extending in the future throughout the USA, Canada and worldwide."

To inquire about a franchise, or other general inquiries, please contact David Freeman at (416) 368-2220 ext 270 or email at dfreeman@spotcoffee.com.

About SPoT Coffee

SPoT Coffee trades on the TSX Venture Exchange under the symbol SPP. SPoT designs, builds and operates community oriented cafés that provide its customers with the highest quality service, signature made-to-order meals and the world's finest in-house roasted gourmet coffee. Each SPoT café is distinctively designed to suit their local neighbourhoods, creating warm and friendly gathering places for the community. SPoT's commercial business focuses on retail stores, business accounts and third party resellers such as universities and hospitals.

Forward-Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

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