Item 1. Business
ITEM 1. BUSINESS
Overview
Kisses From Italy Inc.
(together with its subsidiaries, hereinafter referred to as “us,” “our,” “we,” or the “Company”)
was incorporated in the State of Florida on March 7, 2013, with a focus on developing a fast, casual food dining chain restaurant business.
It currently operates through the following wholly-owned subsidiaries: (1) Kisses From Italy 9 th LLC, (2) Kisses From
Italy-Franchising LLC; and (3) Kisses From Italy, Inc. (Canada), a company incorporated under the laws of Canada and registered in Quebec
on December 23, 2020.
The Company’s main
focus is to develop a fast, casual food dining chain restaurant business of corporate-owned restaurants and expanding through a nationwide/international
franchise and territory sales program. The Company commenced operations in May 2015 by opening its first location in Fort Lauderdale,
Florida, which is the only operating restaurant as of the date of this Annual Report. The Company also opened in 2016 three additional
restaurants, located in various Wyndham Hotel properties in the Pompano Beach, Florida area, but these restaurants are no longer operational
(in December 2017, the Company vacated one of its restaurants due to a hurricane; in June 2021, the Company consolidated its two Wyndham
restaurants into one location to become more efficient, and in May 2023, the Company made the decision not to renew a lease in Wyndham
Palm Aire location and to close its operations there.
The Company opened its
European location in Ceglie del Campo, Bari, Italy, in October 2019. The Bari location closed in April 2020 due to the Covid-19 pandemic,
briefly re-opened and permanently closed on December 31, 2023. Such a location was intended to serve as the distribution center for future
products for European locations, as well as to be used as a training facility for European franchises. However, this initiative has been
severely curtailed due to the onset and lingering impact of Covid-19 in Europe. The Company’s relationship with MediaCom SAS for
distribution and importing of European products remains intact and the distribution hub has been moved to Naples, Italy at the MediaCom
SAS offices.
In June 2020, the Company
entered into a multi-unit development agreement (the “Development Agreement”) pursuant to which it granted development rights
to Demasar Management, Inc. (“Demasar”) to open and operate up to 100 restaurants in Canada. Under this Development Agreement,
the developer is obligated to open a minimum of 20 restaurants by June 17, 2025.
In September of 2020,
we entered retail food and grocery stores with Kisses From Italy branded products in Canada. The product launch began in November of 2020
and Kisses From Italy branded products were in nine retail stores by the end of 2020. Currently, Kisses From Italy branded products are
in 90 stores across Ontario and Quebec, Canada.
In April 2021, we entered
into a Consulting Agreement with Fransmart, LLC, a Delaware limited liability company (“Fransmart”), pursuant to which we
engaged Fransmart as our exclusive global franchise developer and representative for a period of ten years.
In June 2021 and November
2021, the Company opened its first two franchise locations in Chino, California and Montreal, Canada, respectively. Due to the difficulty
of opening new retail food establishments with proper levels of staffing, and ongoing inflationary pressures and supply chain constraints
due to COVID, the Chino, California location was unable to generate profitable operations and was closed as of December 31, 2023. As the
economic environment in Quebec, Canada continued its decline, the Montreal location assets were sold to a non-franchisee third party.
During the time these locations were open, the Company did not generate any franchising fees.
On March 1, 2023, the
Company entered into a Strategic Alliance Agreement (the “SAA”), with SC Culinary LLC, the creator and owner of, and in possession
of, a quick-service food concept. In connection with the SAA, Scott Conant, the owner of all rights in and to his name, voice, image,
and likeness (the “NIL Rights”), has granted SC Culinary the exclusive right to license the NIL Rights to third parties. On
October 10, 2023, Scott Conant was appointed as a member of the board of directors of the Company. The Parties intended that SC Culinary
will license its interest in this quick-service food concept, the intellectual property rights,
and the NIL Rights to the Company’s new wholly-owned subsidiary, The Ponte San’gwich Shoppe & Italian Deli.
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On February 8, 2024,
the Company and SC Culinary LLC entered into a termination agreement, pursuant to which the parties terminated the SAA and agreed that
neither the Company nor SC Culinary has any further liability or obligation to the other with respect to the terms of the SAA, and the
Company has no interest in any intellectual property rights owned or used by either SC Culinary or Scott Conant. In connection with the
termination of the SAA, on February 8, 2024, Scott Conant resigned from the board of directors of the Company effective
immediately. On February 16, 2024, the Company dissolved its subsidiary, The Ponte San’gwich Shoppe & Italian Deli.
Our
Strategy
We strive to provide
the highest level of service, high-quality ingredients, and products. Enveloped in our mission is our philosophy to support and partner
with local producers and suppliers within the regions in order to provide a truly authentic experience to our customers. Our vision is
to leverage the success of our flagship store and our initial hotel location in the South Florida market and to expand into other regions
on a local, state, national, and global level. The main focus is doing so through our continued corporate-owned store expansion, along
with the development and sales of additional locations through the advancement of our franchise and territorial rights program.
Our
Menu
Our menu includes grilled
paninis including an Italian style Panini, sausage, beef, sliced pork, or chicken topped with quality natural “sott’olio”
(grilled and marinated vegetable) products at prices ranging from $5.95 to $7.95. We also offer deli paninis including fresh cheese Panini,
prosciutto, salami, capocollo, bresaola, and turkey panini’s ranging in price from $5.95 to $7.95. All our panini’s include
lettuce, tomato, and one choice of cheese and three choices of marinated vegetables, or three choices of grilled vegetables.
We also offer desserts
including a Nutella sandwich, a variety of fresh Danish, cannoli, Italian biscotti, sfogliatelle or a corneti, ranging in price from $1.50
to $2.50. Our breakfast menu is served all day We also have a full coffee and tea favorites, including espresso, cappuccino, and other
coffee drinks, soft drinks, bottled water, and juices, as well as various flavors of granite (ices).
Our vision is to transport
true authentic and rustic taste from the provinces of Italy through our menu items. We intend to offer products that will cater to all
diets, including gluten-free diets and emphasize fresh products with no preservatives.
All our sott’olio and
coffee products are made in Italy. Our management is in constant communication with our product manufacturers and search for high quality
and authentic products from different regions from Southern Italy including Sicily, Calabria, Puglia, Napoli, Potenza, and Toscana. Ensuring
freshness and quality, our representatives work closely with local farmers and ranchers for all meats and fresh vegetables. All our products
are D.O.P. (Protected Designation of Origin) certified and defined in the European Commission Regulations.
Quick Service Restaurants
Our initial and the only
operating restaurant as of the date of this Annual Report is located at 3146 NE 9th Street in Fort Lauderdale, Florida. This location
is across the street from an Atlantic Ocean public beach and consists of approximately 1,000 square feet of a retail restaurant with seating
for up to 25 guests. This location is managed by one senior employee/manager and individually assessed based on foot traffic, seasonality,
and other demographic factors and abide by the standards and rules set forth by the State of Florida Department of Health, and our Italian
location abides by the standards and rules set forth by Italy’s Ministry of Health and the Puglia (Apulia) region’s legislative/administrative
authority. Michele Di Turi, our co-Chief Executive Officer, possesses the Certified Food Manager accreditation and has the proper authority
to provide necessary food safety courses.
The Company also opened
in 2016 three additional restaurants, located in various Wyndham Hotel properties in the Pompano Beach, Florida area, but these restaurants
are no longer operational (in December 2017, the Company vacated one of its restaurants due to a hurricane; in June 2021, the Company
consolidated its two Wyndham restaurants into one location to become more efficient, and in May 2023, the Company made the decision not
to renew a lease in Wyndham Palm Aire location and to close its operations there.
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In October 2019, the
Company opened its European location in Ceglie del Campo, Bari, Italy but closed it in April 2020 due to the Covid-19 pandemic. Such location
was intended to serve as the distribution center for products for European locations, as well as to be used as a training facility for
European franchises. However, this initiative has been severely curtailed due to the onset and lingering impact of Covid-19 in Europe.
This location was permanently closed on December 31, 2023.
Restaurant Franchising
We are also engaged in
franchising our restaurant concept so that we can build market share and brand awareness. In May 2017, we completed our National Franchise
License which permits us to sell franchises in all of the states in the United States except for New York, Virginia, and Maryland which
we intend to add at later dates if sufficient demand exists. On June 23, 2017, we completed the sale of our initial two Florida franchises
at a price of $15,000 per location. These locations are set to be developed at a later date. In June 2021 and November 2021, the Company
opened its first two franchise locations in Chino, California and Montreal, Canada, respectively. Due to the difficulty of opening new
retail food establishments with proper levels of staffing, and ongoing inflationary pressures and supply chain constraints due to COVID,
the Chino, California location was unable to generate profitable operations and was closed as of December 31, 2023. As the economic environment
in Quebec, Canada continued its decline, the Montreal location assets were sold to a non-franchisee third party. During the time these
locations were open, the Company did not generate any franchising fees.
In June 2020, the Company
entered into the Development Agreement pursuant to which it granted development rights to Demasar to open and operate up to 100 restaurants
in Canada. Demasar will be taking the lead for franchise expansion and assisting in the Canadian brand building for the Kisses From Italy
brand.
Each of our franchise
restaurants are required to conform to a standard of interior design, featuring a distinctive and comfortable Italian décor. Our
prior approval is required for each specific location of a proposed franchise restaurant, which includes a requirement that the same be
in a clearly identifiable commercial location built out in accordance with our standards. Franchisees are also required to satisfactorily
complete training and purchase certain equipment and supplies from us and other approved suppliers. We also require the purchase of a
point-of-sale system and data polling services from a specified supplier and a computer system that meets established system standards.
Franchisees will be required
to purchase approximately 90% to 95% of their supplies and food inventory either directly from us, or from approved suppliers. We attempt
to negotiate system-wide volume discounts and/or rebates for our franchisees from approved suppliers and if successful, pass such discounts
and/or rebates on to franchisees based on the volume of their purchases from the suppliers providing the discounts.
Our franchise agreement
with franchisees also requires our franchisee to pay royalties of 9% of gross sales, which are defined to be total actual charges for
all products (food and non-food) and services, such as catering and delivery, sold to customers, exclusive of taxes, every week. We retain
6% of this royalty and the remaining 3% goes towards a marketing fund. The marketing fund is broken down in two parts, 2% for local marketing
and 1% for national marketing. We anticipate that until national coverage is warranted, local and/or regional marketing campaigns will
be implemented.
We also require that
our franchisee enter into a collateral assignment and assumption of lease through which we are granted a security interest in all of the
furniture, removable trade fixtures, inventory, licenses, and supplies located in the restaurant as collateral for (1) the payment of
any obligation owed to us, (2) any default or breach under the terms of the lease, and (3) any default or breach of any of the terms and
provisions of the franchise agreement. In the event of a breach of or default under the lease or payment by a franchisee as a result of
a breach or default, we may be entitled to possession of the restaurant and all of our rights, title, and interest in and to the lease.
We also enter into a conditional assignment of telephone numbers and listings that assigns us telephone numbers and directory listings
upon termination or expiration of a franchise relationship.
The initial term of a
franchise agreement is ten years, with a renewal provision of between 2-5 years on the terms and conditions of the franchise agreement
so long as there has been substantial compliance with the franchise agreement and pay a to-be-determined fee for each renewal.
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Franchisees are also
required to replace any franchise that terminates or expires or any restaurant that closes within the territory if necessary, to maintain
the number of our named restaurants required in the development schedule. If a franchisee fails to meet the development schedule, we have
the right to terminate the franchise agreement or adjust that territory to eliminate any state in the territory where they have not achieved
the minimum number of restaurants required for that state.
We are required to perform
the following services:
· Solicitation of new franchise owners - Actively and continuously market and promote through advertising
and solicit prospective franchise owners in their territory according to an annual plan and budget that a franchisee develops and submits
for our approval.
· Site selection, leasing, and build-out - Consult and advise franchise owners with site selection
and lease negotiation of the restaurants. Develop and maintain relationships with landlords for purposes of obtaining sites for restaurants
and coordinating efforts with franchise owners to lease such sites. Develop relationships with landlords, contractors, equipment suppliers,
and service providers in the territory and assist in the supervision of the build-out for the restaurants in our territory.
· Training - Provide all initial training to the franchise owners, as well as supplemental and refresher
training at our training restaurant. Schedule and coordinate all training of all franchise owners with our required mode of operations.
· Opening assistance - Provide grand opening support, including coordinating marketing with local
television, radio, newspapers, and trade publications. Provide franchise owners with supervisory assistance and guidance in connection
with the opening and initial operations of their restaurants. Provide pre-opening and post-opening assistance for each new restaurant.
· Monitoring, audit, and inspection - Monthly monitoring of the operation of their restaurants, including
monitoring and reporting of the sales volume and other data as determined from time to time. Monitor and communicate to our franchisee
the marketing efforts of our restaurants. Conduct or assist franchisees with inspecting or auditing restaurants and their owners, with
visits no less than monthly and in-depth reports at least quarterly.
· Vendors and suppliers - Notify vendors and, if necessary, locate new vendors for the franchises
and coordinate distribution and purchasing programs. Assist franchisees in developing programs for suppliers and distributors of approved
products. Maintain positive relationships and evaluate additional incentive programs and marketing programs from approved and preferred
suppliers, vendors, and other designated parties.
· Continuing assistance to franchise owners - Provide continuing operating assistance and assist
in facilitating transfers and renewals of franchises.
We also require our franchisees
to maintain certain staffing levels. For the first development year, we require each location to have 2 corporate employees, increasing
to 3 in the fifth development year.
If a franchisee fails
to perform services and we need to assume such tasks, we require that they pay us an amount equal to 125% of the expenditures incurred
by us, and we have the right to terminate the agreement after notice of a 30-day cure period.
Each franchisee must
refer all inquiries for franchises in their territory to us. Under the terms of an Area Representative Agreement, we have the sole right
to grant franchises in all of our unsold territories, terminate a franchise agreement, and approve site selections, leases, and other
franchise real estate transactions.
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Franchise
Marketing
Our
marketing strategy for establishing multi-unit franchises is to contact individuals or entities that have previously developed franchises
in other concepts. This strategy allows us to find people with the proper knowledge, experience, and financial resources to develop a
successful franchise operation in a timely fashion.
We seek individuals or
groups with the skills and financial strength to operate multi-unit franchise organizations within specific geographic territories.
We anticipate that a franchise territory will consist of areas that are either cities or counties depending on population. We seek to
identify people with considerable experience in the management of food service venues who also have sufficient start-up capital to open
several of our restaurants. We have entered into discussions with several possible franchise owners, however. we currently have no franchise
agreements.
We will consider the
skills and investment capital that each potential multiple franchise owner presents to determine the size and nature of the territory
and the minimum number of our restaurants that the franchise owner will be required to maintain in the territory in order keep the exclusive
rights to that territory. We will review the demographics of each proposed location to consider the appropriate number of restaurants
in each area based upon population and other factors including per capita income and then set the minimum number of restaurants at half
the amount. Franchisees will not be restricted from opening additional restaurants beyond the minimum for their territory. We have not
yet generated revenue from the sourcing of franchises and there are no assurances we will ever generate revenues from this business concept.
Commissary
System
We plan to develop centralized
commissary facilities that will serve all of the restaurants that we own in a given region. We believe that a commissary that serves a
region of restaurants will improve efficiency and consistency for the restaurant concept. We also believe that a commissary system will
allow our restaurants to be approximately 500 square feet smaller than they would otherwise be. We plan to build commissaries in areas
with lower rent. In this manner, we plan to save the difference between the 500 fewer square feet that retail rental space would cost
and the commissary’s costs located in a lower-rent area. Our commissary will have storage space for paper products as well as walk-in
coolers to store food. Food preparation for sauces, salad dressings, and other base ingredients will be done in the commissary “clean
room” and then delivered to local restaurants daily. We believe central food preparation of sauces and base ingredients will maintain
the consistency of our restaurants’ products and possibly reduce labor costs.
Restaurant
Advertising
Our advertising has and
will consist primarily of newspaper print ads, direct mailing efforts and also through social media, including Facebook, Twitter, and
other social media outlets. We also participated in other forms of advertising. For example, we intend to use an airplane to advertise
our Kisses banner to the Fort Lauderdale beach crowd, offering promotional free coffee and T-shirts. Our ads will contain a coupon for
a free coffee with the purchase of any meal item.
As we open restaurants
in new markets we plan to duplicate the advertising effort we employed in Fort Lauderdale and to spend initially approximately 2% to 3%
of monthly revenue for local advertising on a per company-owned restaurant basis. Since we plan to build multiple restaurants simultaneously
within a specific geographic region, we believe our advertising cost as a percentage of revenue will decrease as we increase the number
of restaurants within a region. There are no assurances we will successfully open multiple restaurants in the future.
Competition
The fast-food segment
of the restaurant industry is highly competitive and fragmented. In addition, fast food restaurants compete against other segments of
the restaurant industry, including fast-casual restaurants and casual dining restaurants. The number, size, and strength of our competitors
vary by region. Our competitors also compete based on a number of factors, including taste, the speed of service, value, name recognition,
restaurant location, and customer service.
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The restaurant industry
is often affected by changes in consumer tastes; national, regional, or local economic conditions; currency fluctuations; demographic
trends; traffic patterns; the type, number, and location of competing food retailers and products; and disposable purchasing power. Our
restaurant concept is expected to compete with international, national, and regional restaurant chains as well as locally-owned restaurants.
We will compete not only for customers, but also for management and hourly personnel, suitable real estate sites, and qualified franchisees.
We believe that each
of the following restaurants may provide competition to our restaurants because they are franchise operations that sell sandwiches and
coffee:
·
Jimmy John’s
·
Subway
·
Chipotle Mexican Grill
·
Miami Subs Grill
·
Starbucks
Of the above-listed restaurants,
all are larger and have significantly greater financial resources than we currently have available.
Government
Regulations
We are subject to various
federal, state, and local laws affecting our business. Our restaurants must comply with licensing and regulation by a number of governmental
authorities, which include health, sanitation, safety, and fire agencies in the state or municipality in which the restaurant is located.
In addition, we must comply with various state laws that regulate the franchisor/franchisee relationship.
We are also subject to
federal and state laws governing employment and pay practices, overtime, tip credits, and working conditions. The bulk of our employees
are paid on an hourly basis at rates related to the federal and state minimum wages.
In addition, we are subject
to federal and state child labor laws which, among other things, prohibit the use of certain “hazardous equipment” by employees
18 years of age or younger.
Our facilities must comply
with the applicable requirements of the Americans with Disabilities Act of 1990 ("ADA") and related state accessibility statutes.
Under the ADA and related state laws, we must provide equivalent service to disabled persons and make reasonable accommodation for their
employment. In addition, when constructing or undertaking remodeling of our restaurants, we must make those facilities accessible. Under
the ADA, we could be required to expend funds to modify our restaurants to better provide service to or make reasonable accommodation
for the employment of disabled persons. We continue to monitor our facilities for compliance with the ADA in order to conform to its requirements.
We believe future expenditure for such compliance would not have a material adverse effect on our operations.
As a franchisor, we will
be soliciting prospects for franchises and are subject to federal and state laws pertaining to franchising. These laws require that certain
information be provided to franchise prospects at certain times and regulate what can be said and done during the offering process. Some
states require the franchise offering circular to be registered and renewed on an annual basis.
We are subject to laws relating to information
security, privacy, cashless payments and consumer credit protection and fraud. An increasing number of governments and industry groups
worldwide have established data privacy laws and standards for the protection of personal information, including social security numbers,
financial information (including credit and debit card numbers) and health information.
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Trademarks
We have applied for and
received a registered trademark of our logo in Italy, No. 0001 528191. This trademark expires in September 2029. We have also obtained
the registered trademark of our logo in the United States (the United States Patent and Trademark Office) Serial No. 87138230. This trademark
expires in August 2026. Both trademarks are subject to automatic renewal upon payment of renewal fees.
Industry
Overview
The 2023 National Restaurant
Association State of the Restaurant Industry report examines key factors impacting the industry including the current state of the economy,
operations, workforce, and food and menu trends to forecast sales and market trends for the year ahead. The report is an authoritative
look at the industry and its opportunities based on a range of national surveys of restaurant owners, operators, chefs, and consumers.
Key findings illustrating
the industry’s economic conditions include:
·
Growth will continue: The foodservice industry is forecast to reach $997 billion in sales in 2023, driven in part by higher menu prices;
·
Industry help wanted: The foodservice industry workforce is projected to grow by 500,000 jobs, for total industry employment of 15.5 million by the end of 2023;
·
Building on a Solid Foundation: For 70% of operators, business conditions have settled into or are on the path to their new version of normal;
·
Consumers want restaurant experiences: 84% of consumers say going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up;
·
Rising costs create challenges: 92% of operators say the cost of food is a significant issue for their restaurant.
·
Competition is heating up: In 2023, 47% of operators expect competition to be more intense than last year.
“The restaurant
and foodservice industry is fueling the American economy. Our hiring rate and wage increases are outpacing the overall private sector,
and this year our industry will contribute nearly $1 trillion to the economy,” said Michelle Korsmo, president & CEO of the
National Restaurant Association. “The 2023 State of the Restaurant Industry report offers an in-depth analysis of what’s driving
this growth and the tremendous opportunities for restaurant owners, operators, and team members who want to grow their businesses and
expand their careers.”
Pandemic Pivots become
Permanent
The temporary “pivots”
developed during the pandemic — expanded delivery services, outdoor dining options, to-go alcohol offerings, and investments in
technology — are the foundation of the industry’s “new normal.” At least 4 in 10 operators in each of the three
limited-service segments — quick service, fast casual, and coffee and snack — believe the addition of drive-thru lanes will
become more common in 2023. For others, outdoor dining and alcohol-to-go are becoming table stakes. Across all six major segments, more
than 9 in 10 operators plan to continue offering outdoor seating and the same number of operators are also likely to continue offering
alcohol-to-go, if their jurisdiction allows it.
Despite widespread investment
in technology in the last few years, the restaurant industry is still far from becoming a tech-centric sector. Most operators still consider
their use of technology as mainstream rather than leading edge.
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In 2023, many operators
want to keep moving toward the edge, with more than 4 in 10 planning investments in equipment or technology to increase front- and back-of-the-house
productivity. These investments are anticipated mostly in the order and payment space, rather than automated systems or robots that prepare
and serve food. Other operational takeaways include:
Among fine-dining restaurants
that offered delivery during the pandemic, 79% added it for the first time; 8 in 10 of those plan to continue.
Two-thirds of adults
say they’re more likely to order takeout food from a restaurant than they were before the pandemic.
Off-premises-only locations
are expected to grow in popularity; more than 4 in 10 limited-service operators think they will be more common this year.
69% of adults say they
like the option to dine outside.
An Industry of Opportunity
The restaurant and foodservice
industry added 2.8 million jobs over the past 24 months, bringing the industry total to 15 million at the end of 2022; however, the foodservice
industry remains 400,000 jobs below pre-pandemic levels.
Most restaurant operators
will be actively looking to boost staffing levels in 2023, while carefully balancing staffing needs with business conditions. Eighty-seven
percent of operators say they’ll likely hire additional employees during the next 6–12 months if qualified applicants are
available. Key figures on the restaurant workforce include:
Between 2023 and 2030,
the foodservice industry is projected to add an average of roughly 150,000 jobs a year, with total staffing levels projected to reach
16.5 million by 2030.
Only 1 in 10 operators
think recruiting and retaining employees will be easier in 2023 than it was in 2022.
The restaurant industry
has long been the primary training ground for new entrants to the workforce and in 2022, nearly a quarter of jobs were filled by first-time
employees.
58% of operators say
using tech and automation to alleviate labor shortages will become more common in their segment in 2023; however, technology is generally
complementary to human labor and primarily intended to enhance rather than replace workers in the restaurant industry.
Flexibility to Accommodate
Rising Food Costs and All-Hours Dining
Demand for restaurant
experiences remains strong among consumers who are hungry to connect over shared meals. Operators are taking creative cost-saving approaches
to temper elevated expenses, including food, labor, occupancy, and utilities, by streamlining their menus. With the rise of remote work
blurring traditional meal times, operators are focusing on new opportunities to entice customers at all hours with engaging offerings,
including off-hours or slow-day value deals, flexible pricing, multi-course meal bundles, meal kits and subscriptions, apparel, and more.
Meanwhile, many operators plan to add to their menus more healthier and nutritious meal options, eco-friendly items, and dishes tailored
to takeout in 2023. Key data points on food and beverage trends include:
93% of operators say
their restaurant’s total food costs are higher than they were in 2019.
A majority of operators
across all segments expect to keep their menus in 2023 similar in size to last year.
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69% of adults say they
are likely to purchase a meal kit (measured ingredients with cooking instructions), including more than 8 in 10 Gen Z adults and millennials.
Eco-friendly business
practices continue to draw consumers, especially millennials.
“As the restaurant
industry adapts to a new normal, operators’ ability to be flexible and diversify their operations is essential to thriving,”
said Hudson Riehle, senior vice president of Research for the National Restaurant Association. “With profitability under pressure,
operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises
business in order to satisfy customers in 2023.”
Employees
We currently have 3 full-time
employees. Our officers and directors are not employees of the Company, but they are performing services for the Company. We do not have
any part-time employees. Our employees work at will and are not represented by a collective bargaining unit. We believe our relationship
with our employees is excellent in most cases. We require all our employees and consultants to sign a confidentiality and non-disclosure
agreement. Our success relies on our ability to hire additional employees, particularly on the local sales side. We believe there are
numerous quality people to choose from throughout our area of targeted expansion.
We anticipate that once
we grow, we will require a franchise director and a Chief Financial Officer/Controller, as well as various administrative support personnel.