What changed in this filing

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Item 1. Business

2021-04-15 compared with 2020-05-29 · 275 added, 186 removed, 344 unchanged (57% of the section changed)

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striving for these goals, we aspire to connect with our target market and create a great brand with a strong and loyal customer

of December 31, 2019, Muscle Maker and our subsidiaries and franchisees operated thirty-eight Muscle Maker Grill restaurants located

in 15 states and Kuwait, ten of which are owned and operated by Muscle Maker, and 28 are franchise restaurants.

Our restaurants

generated company-operated restaurant revenue of $3,466,553 and $3,869,758 for the years ended December 31, 2019 and 2018, respectively.

For the years ended December 31, 2019 and 2018, our total revenues which includes company restaurant sales, royalty, franchise

fee, rebate revenue derived from franchisees and other revenues were $4,959,005 and $6,022,669, respectively.

the fiscal years ended December 31, 2019 and 2018, we reported net losses of $28,385,044 and $7,204,540, respectively,

and negative cash flows from operating activities of $4,504,226 and $2,726,737, respectively.

As of December 31, 2019, we had

an aggregate accumulated deficit of $53,094,602.

We anticipate that we will continue to report losses and negative cash

As a result of the net loss and cash flow deficit for the year ended December 31, 2019 and other factors, our independent

registered public accountants issued an audit opinion with respect to our financial statements for the year ended December

31, 2019 that indicated that there is a substantial doubt about our ability to continue as a going concern.

are the owner of the trade name and service mark Muscle Maker Grill®, Healthy Joe’s and other trademarks and intellectual

property we use in connection with the operation of Muscle Maker Grill®

We license the right to use the Muscle

Maker Grill®

and Healthy Joe’s trademarks and intellectual property to our wholly-owned subsidiaries, Muscle Maker Development

and Muscle Maker Corp., and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill®

Healthy Joe’s restaurants.

of December 31, 2020, Muscle Maker and our subsidiaries and franchisees operated thirty-two Muscle Maker Grill restaurants located

in 15 states and Kuwait, sixteen of which are owned and operated by Muscle Maker, and sixteen are franchise restaurants.

owned and operated restaurants generated company restaurant revenue of $3,672,944 and $3,466,553 for the years ended

December 31, 2020 and 2019, respectively.

For the years ended December 31, 2020 and 2019, our total revenues which includes company

restaurant sales, royalty, franchise fee, rebate revenue derived from franchisees and other revenues were $4,473,447 and $4,959,005,

respectively.

As of December 31, 2020, we had an aggregate accumulated deficit of $63,193,707.

We anticipate that we will

continue to report losses and negative cash flow.

As a result of the net loss and cash flow deficit for the year ended December

31, 2020 and other factors, our independent registered public accountants issued an audit opinion with respect to our financial

statements for the year ended December 31, 2020 that indicated that there is a substantial doubt about our ability to continue

as a going concern.

are the owner of the trade name and service mark Muscle Maker Grill®, Healthy Joe’s, MMG Burger Bar, Meal Plan AF and

other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill®

license the right to use the Muscle Maker Grill®

and Healthy Joe’s trademarks and intellectual property to our wholly-owned

subsidiaries, Muscle Maker Development and Muscle Maker Corp., and to further sublicense them to our franchisees for use in connection

with Muscle Maker Grill®

and Healthy Joe’s restaurants.

factors and the timing of holidays cause our revenue to fluctuate from quarter to quarter.

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orders and other

public health measures have been implemented across much of the United States.

public health measures were implemented across much of the United States and continue in limited fashion across the

COVID-19 global pandemic continues to rapidly evolve.

The Company is continually monitoring the outbreak of COVID-19 and the

related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations,

financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general,

in addition to the impact on its employees.

Due to the rapid development and fluidity of this situation, the magnitude and

duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this

While there could ultimately be a material impact on operations and liquidity of the Company, at the time of

issuance, the impact could not be determined.

Due to the impact we have limited our operation as mandated by each state and

we temporary closed five of our Company owned locations.

In addition, various franchisee locations had to take the same

action which directly results in a decrease.

The Company is continually monitoring the outbreak of COVID-19 and the related

business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial

position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition

to the impact on its employees.

The pandemic has resulted in a negative impact on the Company’s operations during the year

ended December 31, 2020.

a result of the pandemic the Company has limited its operations through limiting hours of operations, reduced its capacity and

utilized a delivery only concept as mandated by each state and has temporarily closed five of our Company owned locations during

the second quarter of 2020.

In addition, the Company opened two new locations at the end of the third quarter on university campuses

that were subsequently temporarily closed due to the impact of COVID-19 on students returning to campus.

As of the date of the

filing of this report the Company re-opened five of the seven temporarily closed locations and permanently closed two underperforming

Commencing in the second quarter of 2020 the Company provided royalty relief to its franchisees by deferring half of

their royalties earned by the Company through July 2020.

The Company has not attempted to collect the deferred royalties as of

the date of the filing of this report as we provide time for the franchise locations to fully recover to pre-pandemic conditions.

The executive team deferred a portion of their salaries in 2020 and some members continue to defer salary as of the date of the

filing of this report.

In addition, various franchisee locations had to take similar actions by temporarily closing their locations

and limiting their operations as mandated by each state.

As of the date of the filing of this report seven of the franchise locations

have permanently closed.

to the rapid development and fluidity of this situation, the

magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date

of this report.

While there could ultimately be an additional material impact on operations and liquidity of the Company, the

full impact could not be determined, as of the date of this report.

operate within the Limited-Service Restaurant, or LSR, segment, of the United States restaurant industry, which includes quick

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We believe our differentiated, high-quality healthy-inspired menu delivers great

value all day, every day and positions us to compete successfully against both QSR and fast-casual concepts.

value all day, every day and positions us to compete against both QSR and fast-casual concepts.

expect that the upward trend towards healthier eating will attract and increase consumer demand for fresh and hand-prepared dishes,

leading to a positive impact on our sales.

implementing our business plan, we plan to pursue the following strategies.

which may lead to a positive impact on our sales.

our 2020 business plan and the restaurant industry in general was interrupted and modified due to Covid-19, we re-positioned the

Company to better support an anticipated change in the restaurant industry.

Our revised strategy continues to focus on serving

“healthier for you”

meals in non-traditional locations and methods while emphasizing a shift into delivery, ghost

kitchens, direct to consumer meal prep and strategic acquisitions.

We believe the restaurant industry has experienced a change

in the way consumers interact with brands.

We believe consumers have become more dependent on new technologies, unique locations

and new methodologies to access restaurants.

We believe we have positioned the company in a unique way for future growth in a

post-covid environment where consumers rely on new methods to order and access restaurant meals such as third-party delivery services,

ghost kitchens and direct to consumer shipments of meal plans.

In implementing our revised business plan, we plan to pursue

the following strategies.

Our System-Wide Restaurant Base .

We believe we are in the early stages of our turn-around growth story with 38 current locations

in 15 states and Kuwait, as of May 29, 2020.

near-term strategy focuses on two areas of unit level growth –

company-operated restaurants in non-traditional locations

such as universities, office buildings, military bases, ghost kitchens, etc.

and franchise growth by expanding in existing

markets, especially in the Northeast region of the United States.

We believe this market provides an attractive opportunity

to leverage our brand awareness and infrastructure.

year ended 2019, we opened two new company-operated and four new franchise restaurants.

In addition, we purchased two franchise

locations that are now company-operated.

The company plans on opening or acquiring 12-16 new company-operated restaurants

and two to four franchise operated locations in 2020.

In addition to the United States-based franchise locations, our international

franchisee in Kuwait opened one location in fiscal 2019.

In November 2019, we opened our first Healthy

Joe’s concept.

This was formerly a Muscle Maker Grill location that was converted into the Healthy Joe’s concept.

Healthy Joe’s focuses on healthier for your recipes and products featuring a different menu than a typical Muscle Maker

The concept is designed to attract a wider audience and features menu items such as wild caught Norwegian salmon, fresh

brewed iced teas, fresh lemonades, locally baked breads, house made avocado smash, fruits, nuts and other new trending menu

The menu features hot topped bowls, salads and oven toasted sandwiches.

All protein, cheese and sauces are run though

a 500-degree oven to add a unique approach to serving our products.

Our strategy focuses on non-traditional locations.

We believe these locations offer somewhat

of a buffer against macro-economic forces.

These locations tend to be destination locations, captured audiences or inside other

larger venues.

Our current focus is on military bases, college campuses and ghost kitchens while also increasing our consumer

reach through direct to consumer meal plan delivery via UPS or customer pickup.

As of December 31, 2020, we had 6 open military locations.

These locations are

mostly in food court settings on military bases.

These tend to be captured audiences

but also support visitors, base personnel and military member families.

As of December 31, 2020, we have built 4 college campus locations with the

Northern Virginia Community College System.

These locations were built in anticipation

of students attending classes post-covid and the intent is to re-open these locations

in the summer or fall semester of 2021.

In addition to these four locations, we also

have one university location under agreement at the Texas Tech Medical Center in El Paso

This location is currently in the construction phase.

As of December 31, 2020, we had five free standing ghost kitchen locations

open in Chicago and Philadelphia.

We currently have five additional locations

under agreement for New York City, Miami and Providence.

The ghost kitchens run multiple

brands out of one location which include Muscle Maker Grill, Healthy Joes, Meal

Plan AF, Muscle Maker Burger Bar, Bowls Deep, Wrap It Up, Salad Vibes and other concepts.

Each location can support 6-8 different concepts all running out of one ghost kitchen.

This creates the appearance of 6-8 different restaurants to consumers for ordering various

entrees but leverages ingredients and infrastructure across all concepts to reduce the

number of ingredients needed for each concept.

addition, in 2020, the Company purchased 2 existing franchise locations and is in the

process of launching additional ghost kitchens out of these locations in addition to

Muscle Maker Grill offerings.

year ended 2020, we opened six new company-operated restaurants of which five locations

are delivery only ghost kitchen locations.

In addition, we purchased two franchise locations

that are now company-operated.

Comparable Restaurant Sales.

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Strategy and Evolution.

We will continue to adapt our menu to create entrees that complement our healthy-inspired offerings

and that reinforce our differentiated fast casual positioning.

We believe we have opportunities for menu innovation as we

look to provide customers more choices through customization and limited time alternative proteins, recipes and other healthy-inspired

Our marketing and operations teams collaborate to ensure that the items developed in our test stores can be executed

to our high standards in our restaurants with the speed and value that our customers have come to expect.

To provide added

variety, from time to time we introduce limited time offerings such as our grass-fed hamburger bar menu, smoothie of the month

program, keto your way menu, fish tacos and other seasonal items.

Some of these items have been permanently added to the menu.

We will continue to adapt our menu to create entrees that

complement our healthy-inspired offerings and that reinforce our differentiated fast

casual positioning.

We believe we have opportunities for menu innovation as we look to

provide customers more choices through customization and limited time only alternative

proteins, recipes and other healthy-inspired ingredients.

Our marketing and operations

teams collaborate to ensure that the items developed in our test stores can be executed

to our high standards in our restaurants with the speed and value that our customers

have come to expect.

To provide added variety, from time to time we introduce limited

time offerings such as our grass-fed hamburger bar menu, smoothie of the month program,

keto your way menu, healthy tacos and other seasonal items.

Some of these items have

been permanently added to the menu.

November 2019, we opened our first Healthy Joe’s concept.

This was formerly a Muscle Maker Grill location located

in Tribeca New York that was converted into the Healthy Joe’s concept.

Healthy Joe’s focuses on healthier

for your recipes and products featuring a different menu than a typical Muscle Maker Grill.

The concept is designed to

attract a wider audience and features menu items such as wild caught salmon, fresh brewed iced teas, fresh lemonades,

locally baked breads, house made avocado smash, fruits, nuts and other new trending menu items.

The menu features hot

topped bowls, salads and oven toasted sandwiches.

All protein, cheese and sauces are run though a 500-degree oven to add

a unique approach to serving our products.

Due to the temporary Covid related closure of this new concept in 2020, we

plan on relaunching the grand opening in 2021 as the Covid related restrictions are relaxed in New York City.

Company is in the process of expanding the menu offerings in most of our non-military company owned and operated locations

through ghost kitchen concepts within the existing Muscle Maker Grill locations.

This allows company locations

to leverage existing facilities and labor to launch unique brands without the added infrastructure costs normally associated

with opening a new concept.

For example, in our Chelsea Muscle Maker Grill location, we also run several ghost kitchen

concepts out of the same facility.

These ghost kitchen concepts include Healthy Joe’s and Muscle Maker Burger

New Customers Through Expanded Brand Awareness :

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or proprietary recipe quality of our food.

We also utilize social media community engagement and public relations to increase

the reach of our brand.

Additionally, our system will benefit from increased contributions to our franchise marketing and

various franchise advertising funds as we continue to grow our restaurant base.

Existing Customer Frequency:

We are striving to increase customer frequency by providing a service experience and environment

that “complements”

the quality of our food and models our culture.

We expect to accomplish this by enhancing customer

engagement, while also improving throughput, order execution and quality.

We not only work to reward our guests with a great

value and guest experience, we reward them for their loyalty as well.

Frequent Muscle Maker Grill guests can take advantage

of our loyalty program, Muscle Maker Grill Rewards, in which points are awarded for every dollar spent towards free or discounted

menu items as well as special, members only coupon offers.

Members use the Muscle Maker Grill Rewards app to receive notifications

announcing new menu items, special events and more.

We utilize various marketing techniques including email, text, social media, print,

influencers, press releases and local store marketing.

We believe the restaurant industry has changed over the past year and

consumer preferences have shifted towards an emphasis on convenience, speed and mobility in a safe environment.

to an increase in home delivery and direct to consumer meal prep/plan offerings.

We believe Muscle Maker Grill has

the ability to adjust our business strategy to accommodate these consumer trends as we are not locked in to extensive four

wall location leases and are able to transform the business to meet consumer needs.

2020, the company expanded its delivery services through third-party delivery companies such as Uber Eats, GrubHub, DoorDash,

Seamless and others.

to Grow Dayparts:

We currently have multiple dayparts and segments where revenue is generated in our restaurants.

dayparts and segments include:

lunch, dinner, catering, smoothies/protein shakes and meal plans in all of our locations, and

breakfast and grab & go in select locations.

We expect to drive growth across our dayparts through enhanced menu offerings,

innovative merchandising and marketing campaigns.

We plan to continue introducing and marketing limited time offers to increase

occasions across our dayparts as well as to educate customers on our lunch and dinner offerings.

Muscle Maker Grill has the

unique opportunity to grow in the pre-packaged, portion-controlled meal plan category.

Currently, we offer pre-portioned and

packaged meal plans for consumers who want to specifically plan their weekly meals for dietary or nutritional needs.

meal plans can be delivered to a consumer’s home or picked up at each restaurant location.

Third party delivery services

such as Uber Eats, Grub Hub, DoorDash, Seamless and others offer an expansion beyond the four walls of our restaurants and

represents a growing segment of our overall revenue.

Profitability .

We continuously look for ways to improve profitability, while also investing in personnel and infrastructure

to support our future growth.

We will seek to further enhance margins over the long-term by maintaining fiscal discipline and

leveraging fixed costs.

We constantly focus on restaurant-level operations, including cost controls, while ensuring that we do

not sacrifice the quality and service for which we are known.

Additionally, as our restaurant base grows, we expect that we will

be able to leverage support costs as general and administrative expenses grow at a slower rate than our revenues.

We currently have multiple dayparts and segments where revenue

is generated in our restaurants.

These dayparts and segments include:

lunch, dinner,

catering, smoothies/protein shakes and meal prep/plans in all of our locations, and breakfast

in select locations.

We expect to drive growth across our dayparts through enhanced menu

offerings, innovative merchandising and marketing campaigns.

We plan to continue introducing

and marketing limited time offers to increase occasions across our dayparts as well as

to educate customers on our lunch and dinner offerings.

Muscle Maker Grill has the unique

opportunity to grow in the pre-packaged, portion-controlled meal prep/plan category.

Currently, we offer pre-portioned and packaged meal prep/plans for consumers who want

to specifically plan their weekly meals for dietary or nutritional needs.

plans can be delivered to a consumer’s home or picked up at each restaurant location.

Third party delivery services such as Uber Eats, Grub Hub, DoorDash, Seamless and others

offer an expansion beyond the four walls of our restaurants and represents a growing

segment of our overall revenue.

November 11, 2020, the Company announced an agreement with Happy Meal Prep to launch an online meal plan/prep direct to

consumer mail delivery service.

This agreement allows Muscle Maker Grill to mail pre-made, ready to eat meals direct

to consumers within a 250-mile radius around specific locations.

Consumers can currently select from over 40 meal prep

The company plans to expand the network of locations offering direct to consumer meal plan shipping throughout

2020 while also emphasizing meal prep in a more significant manner in 2020.

The company operates this program under the

musclemakerprep.com website.

and Unique Concept:

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fitness enthusiasts, those starting their journey to a healthier lifestyle, and people trying to eat better while on-the-go.

than just food, our restaurants are a friendly, relaxed and social environment where guests can enjoy great tasting food and engage

with fellow health enthusiasts in their area.

are focused on expanding our presence within new and existing markets by continuing to add franchise partners to our system and

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Our corporate-owned restaurants will focus on an expansion in non-traditional

locations such as military bases, universities and ghost kitchens.

We believe our concept is a unique fit with the military’s

“Operation Live Well”

locations such as military bases, universities and ghost kitchens while also offering direct to consumer pre-made meal prep/plan

offerings to consumers within a 250 mile radius around certain locations.

We believe our concept is a unique fit with the

military’s “Operation Live Well”

campaign and a focus on healthier eating habits.

believe ghost kitchens offer a unique way to expand the brand into new and existing markets with lower capital costs yet provide

the ability to make rapid changes to fit consumer needs.

We believe consumers are looking for alternate ways to interact with

restaurants and receive meals.

Using non-traditional locations, third party delivery, ghost kitchens and direct to consumer meal

plans offers consumers multiple choices on how to access Muscle Maker Grill concepts.

Healthier Menu :

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dine-in, take-out, delivery, catering, meal plans and retail.

We also have franchisees that leverage grab & go coolers as

well as food trucks.

Price Point and Perceived Value:

Muscle Maker Grill offers meals with free ‘power sides’

beginning at $8.99

per meal, using only high quality ingredients such as grass-fed beef, all-natural chicken, whole wheat pastas, brown rice and

a power blend of kale, romaine and spinach.

Our cook to order method, speed of service, hospitality and the experience of our

exhibition style kitchen creates a great value perception for our customers.

Meal Plan meals begin at $6.99 per meal,

which we believe make them not only convenient but affordable too.

beginning at $8.99 per

meal, using only high quality ingredients such as grass-fed beef, all-natural chicken, whole wheat pastas, brown rice and a power

blend of kale, romaine and spinach.

Our cook to order method, speed of service, hospitality and the experience of our exhibition

style kitchen creates a great value perception for our customers.

Meal Plan meals begin at $6.99 per meal, which we believe make

them not only convenient but affordable too.

A significant differentiator is that Muscle Maker Grill offers delivery at many locations nation-wide.

Delivery is an option

through our mobile app or online ordering platform making it easy and convenient for our guests.

Delivery percentages range from

10% up to 75% of sales in our corporate locations..

We strongly believe the delivery segment will continue to grow as our core

demographic has demonstrated the need for online ordering and delivery versus dine-in and take-out.

We and our franchise owners

leverage employees for local delivery but also uses third party services such as Uber Eats, GrubHub, DoorDash, Seamless and others

to fulfill delivery orders.

through our online ordering platform making it easy and convenient for our guests.

Delivery percentages range from 10% up to 75%

of sales in our corporate locations.

We strongly believe the delivery segment will continue to grow as our core demographic has

demonstrated the need for online ordering and delivery versus dine-in and take-out.

We and our franchise owners leverage employees

for local delivery but also uses third party services such as Uber Eats, GrubHub, DoorDash, Seamless and others to fulfill delivery

Stand alone ghost kitchen locations are 100% delivery.

Our diverse menu items are also offered through our catering program making it easy and affordable to feed a large group.

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schools and other organizations.

To make healthy-inspired eating even easier, Muscle Maker Grill’s healthy-inspired nutritionally focused menu

items are available through our Meal Plan program, allowing pre-orders of meals via phone, online or in-store, available for pick

up or delivered right to their door.

Available as five, 10, 15 or 20 meals, guests can choose from 28 Muscle Maker Grill menu

items for each meal.

To make healthy-inspired eating even easier, Muscle Maker Grill’s healthy-inspired nutritionally

focused menu items are available through our Meal Prep/Plan program, allowing pre-orders of meals via phone, online or in-store,

available for pick up or delivered right to their door.

Available as five, 10, 15 or 20 meals, guests can choose from over 40

Muscle Maker Grill menu items for each meal.

With the partnership with Happy Meal Prep, Muscle Maker Grill is now able to ship

meals direct to consumers within a 250-mile radius of participating locations.

All Muscle Maker Grill locations participate in our retail merchandising and supplement program.

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This program gives our guests the opportunity

to manage their healthy lifestyle beyond the four walls of our restaurants.

Muscle Maker Grill, in select locations, offers grab and go kiosks both in the restaurants and non-traditional locations.

The kiosks are comprised of 10 to 12 core meal plan menu items.

We have positioned the kiosks so that guests can grab a meal on

These meals are convenient to guests that chose not to dine in or want additional meals for themselves or family members.

to manage their healthy lifestyle beyond meals they consume at our locations.

Our restaurants are typically in-line or food court locations.

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any liability regarding franchise location leases.

Stand-alone ghost kitchen locations have short term leases usually

in 1 year duration with several renewal options.

Restaurant Counts:

As of December 31, 2019, our restaurant system consisted of 38 restaurants comprised of ten company-operated

restaurants and 28 franchised restaurants located in California, Florida, Georgia, Illinois, Maryland, Massachusetts, Nevada,

New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Texas, Virginia and Kuwait.

As of December 31, 2020, our restaurant system consisted of 32 restaurants comprised of sixteen company-operated

restaurants and sixteen franchised restaurants located in California, Georgia, Illinois, Maryland, New Jersey, New York, North

Carolina, Oklahoma, Pennsylvania, Texas, Virginia, Washington, Rhode Island and Kuwait.

In addition, the Company built four

new location on university campuses but due to Covid-19 restrictions have not yet open these locations but incurred expenses during

the twelve months ended December 31, 2021

Selection Process:

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that live in or near the neighborhoods we are considering.

A typical Muscle Maker Grill may be free standing or located in

malls, airports, gyms, strip shopping centers, health clubs, military bases, non-traditional or highly concentrated business and

residential demographic areas.

Customers order their food at the counter and food servers deliver the food to the appropriate table.

Based on our experience and results, we are currently focused on developing inline sites for franchising and non-traditional locations

such as military bases for company-operated locations.

typical Muscle Maker Grill may be free standing or located in malls, airports, gyms, strip shopping centers, health clubs, military

bases, non-traditional or highly concentrated business and residential demographic areas.

Customers order their food at the counter

and food servers deliver the food to the appropriate table.

Based on our experience and results, we are currently focused on developing

inline sites for franchising and non-traditional locations such as military bases for company-operated locations.

ghost kitchen locations offer a unique opportunity to expand the brand into new markets with lower build-out costs than a typical

Muscle Maker Grill location.

These locations are usually located away from high rent areas where a typical consumer traffic pattern

These locations rely on a delivery radius and consumer orders are placed using third party delivery apps.

as the delivery radius covers densely populated areas for both business and residential areas, we consider the location to be

in an attractive location where we can reach consumers with delivery.

to consumer meal prep/plan locations can either be through existing Muscle Maker Grill locations or can be set up like a commissary

where meals are prepared in a kitchen space not open to consumer traffic.

These locations can be in any area as long as pick up

service via UPS or Fedex is available.

This allows the company to build out locations in favorable rent situations while being

able to mail meal prep/plans direct to consumers within a 250 mile radius.

Restaurant Design

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in the real estate, design and construction process.

ghost kitchens range in size from 200 to 300 square feet.

locations are not open to the public and rely solely on third party delivery to access consumers.

The total cash investment for

a stand-alone ghost kitchen ranges from $50,000 to $100,000 depending on what equipment is required.

There is limited leasehold

improvements and the equipment is modular in general.

This allows the company to reduce its risk in the event a particular location

isn’t working as we can simply move the equipment to a new location and not have leasehold improvements left behind.

kitchens have no consumer dining areas, no bathrooms, no furniture, etc which keeps the cost of buildout to a minimum.

Restaurant Management and Operations

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and efficiency in critical restaurant functions.

alone ghost kitchen locations typically staff 1-2 employees at any time and are managed by personnel who also oversee multiple

The majority of our company-operated restaurant management staff is comprised of former team members who have advanced along

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terms for 15 years, with termination dates ranging from 2023 until 2034.

These agreements are generally renewable for terms

ranging from 5 to 10 years.

These agreements are generally renewable for

terms ranging from 5 to 10 years.

for the payment of initial franchise fees of $35,000.

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in-house preparation, to the preparation of our healthy inspired meals.

use multiple marketing channels, including social media such as Facebook, Instagram and Twitter, email, app notifications, local

use multiple marketing channels, including social media such as Facebook, Instagram and Twitter, email, text marketing, local

store marketing, public relations/press releases and other methods to broadly drive brand awareness and purchases of our featured

We complement this periodically with direct mail and our Muscle Maker Grill Rewards mobile app and e-mail marketing

Muscle Maker Grill Rewards is our e-club and loyalty program.

We engage members via e-mails and push notifications featuring

news of promotional offers, member rewards and product previews.

We complement this periodically with direct mail.

Purchasing and Distribution

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Intellectual Property

have registered Muscle Maker Grill ®, Healthy Joe’s and certain other names used by our restaurants as trademarks or

service marks with the United States Patent and Trademark Office and Muscle Maker Grill ®

have registered Muscle Maker Grill ®, Healthy Joe’s, Muscle Maker AF, MMG Burger Bar and certain other names used by

our restaurants as trademarks or service marks with the United States Patent and Trademark Office and Muscle Maker Grill ®

in approximately one foreign countries.

Our brand campaign, Great Food with Your Health in Mind™, has also been approved for registration with the United States

Patent and Trademark Office.

In addition, the Muscle Maker Grill and Healthy Joe’s logo, website name and address and Facebook,

Instagram and Twitter accounts are our intellectual property.

Our policy is to pursue and maintain registration of service marks

and trademarks in those countries where business strategy requires us to do so and to oppose vigorously any infringement or dilution

of the service marks or trademarks in such countries.

We maintain the recipe for our healthy inspired recipes, as well as certain

proprietary standards, specifications and operating procedures, as trade secrets or confidential proprietary information.

July 2019, we filed and were subsequently awarded for a trademark for “Healthy Joe’s”

as well as secured healthy-joes.com

and cheaterjoes.com for future concept development.

Our brand campaign, Great Food with Your Health in Mind™, has also been approved

for registration with the United States Patent and Trademark Office.

In addition, the Muscle Maker Grill and Healthy Joe’s

logo, website name and address and Facebook, Instagram and Twitter accounts are our intellectual property.

Our policy is to pursue

and maintain registration of service marks and trademarks in those countries where business strategy requires us to do so and

to oppose vigorously any infringement or dilution of the service marks or trademarks in such countries.

We maintain the recipe

for our healthy inspired recipes, as well as certain proprietary standards, specifications and operating procedures, as trade

secrets or confidential proprietary information.

operate in the restaurant industry, which is highly competitive and fragmented.

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restaurant location and customer service.

We believe the restaurant industry has changed due to the Covid-19 pandemic and an emphasis

on delivery, ghost kitchens, direct mail and other non-traditional locations and methods are becoming critical to the restaurant

industry and how consumers interact with brands.

This changing environment will require flexibility and the ability to rapidly

make adjustments.

consumer preferences continue to evolve into healthier eating options, most restaurants are developing healthier menu options.

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The system also provides sales, bank deposit and variance data to our accounting

kitchens and meal prep/plan sales are ordered using online software with reports generated through various software packages.

Corporate Structure

3 unchanged sentences

running our existing franchise operations and continuing to franchise the Muscle Maker Grill name and business system to qualified

Maker Corp., LLC, a directly wholly owned subsidiary, which was formed in Nevada on July 18, 2017 for the purposes of developing

LLC, a directly wholly owned subsidiary, which was formed in Nevada on July 18, 2017 for the purposes of developing

new corporate stores and to also operate these new and existing corporate restaurants.

1 unchanged sentence

specific assets related to a company financing arrangement.

to May 2018 we had a direct ownership interest in Custom Technology, Inc.

Custom Technology, Inc., is a technology and point of

sale systems dealer and technology consultant.

Muscle Maker Corp., LLC had a direct 70% ownership interest in Custom Technology,

Inc., which was formed in New Jersey on July 29, 2015.

On May 24, 2018, we entered into a stock purchase agreement between John

Guild, JohnG Solutions LLC and Custom Technology, Inc.

in which we agreed to sell their 70% ownership in Custom Technology, Inc.

for a total purchase price of $1.00.

Maker Development International.

LLC, a directly wholly owned subsidiary, which was formed in Nevada on November 13, 2020

to franchise the Muscle Maker Grill name and business system to qualified franchisees internationally.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business