A Case Study: Muscle Maker Grill, Inc. (NASDAQ: GRIL)

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We have all heard the phrase “healthier for you” being thrown around these days. We all strive for it, but let’s face it, sometimes it is just easier (or cheaper) to grab the fast-food option in a busy lifestyle. With inflation steadily on the rise, and fear of financial crisis increasing seemingly every day, not only is it difficult to eat healthy, but it is becoming increasingly difficult to invest healthy. Meet GRIL, a healthy for you franchise model focusing on their Pokemoto stores, but also creating a healthy-for-you outlook on their fundamentals.

Overview:

Muscle Maker Grill was founded in 1995 in an effort to provide healthier versions of mainstream dishes that are affordable, healthy, and best of all delicious. In 2021 however, they decided to make a company altering move in purchasing a thirteen-unit poke chain concept “Pokemoto” on May 18, 2021, to add to their MMG restaurants and their other newly acquired concept, SuperFit Foods.

Since then, the Pokemoto concept that has been thriving under a franchise model, has rapidly expanded, and is now registered to sell franchises in all 48 Continental States. The success of the franchise model, that requires as little as $25,000 in franchise fees, has proven itself by rapidly expanding to 60 total franchise agreements signed as of January 24, 2023.

In continuation of their company altering moves, on November 28, 2022, MMG entered into an agreement to form a new subsidiary called Sadot which specializes in shipping agricultural commodities and trading. Based on a pay for performance agreement, MMG agreed to issue shares to a consulting company known as AGGIA LLC FZ which has been met with great success.

Trending News:

Recently, MMG has been quite active with their press releases and has been committed to providing monthly updates to the unaudited revenue figures generated by Sadot. The latest announcement came on April 18, 2023, in which they announced that Sadot has generated over $360 million in revenue since its inception in November of 2022. As per the agreement, in which AGGIA would be given up to eight board members for meeting net income thresholds, on April 11, 2023, it was announced that five of the eight board members have been appointed as a result of the net income earned.

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On the Pokemoto front, it was announced on January 17, 2023, that MMG is registered to sell franchises in all 48 Continental States. This news was then followed up with an agreement on January 20, 2023, with Saladcraft to be able to license their salad bowl concept as a combo restaurant in Pokemoto restaurants. Then, on January 24th it was announced that three franchise agreements were sold in Houston, Texas, bringing the current franchise agreements sold to 60.

CEO Michael Roper continues to bang the drum to bring attention to MMG and has recently presented at the Sequire Investor Summit in Puerto Rico on April 25th which managed to catch the eye of analysts at Alliance Global Partners who initiated a Buy rating with a $2.40 Price Target following the Summit. Unsatisfied with the current price of its stock, the board has also announced a Share Repurchase Program for up to $2 million of its common stock, which is currently in effect at the time of this article.

Reasons for Optimism:

A case can be made by those bullish on MMG for the fact that with a market cap of just $39.3 million, the company is severely undervalued considering Quarter 1 of 2023 has already been reported to have reached a minimum of $200 million from Sadot revenue alone. The recently announced Repurchase Program is a strong vote of confidence by the board and shows that they are willing to invest profits back into the company’s continued growth. A healthy balance sheet, with minimal debt, and the expectation of positive EBITDA in Q1 should continue to drive the price in an upward direction.

Reasons for Concern:

With inflation steadily on the rise, restaurants will begin to feel a squeeze on trying to maintain profits, without hurting their customers with price hikes. Although Sadot has jumped out to quick success there is fear as to whether it is sustainable in the long run. With an average daily volume of around 100k shares traded, it remains difficult to see sustained growth.

Conclusion:

GRIL continues to try and adapt with the times by bringing on new restaurant concepts and expanding its flywheel to multiple revenue streams. Even if you decide that GRIL is not right for your portfolio, hop on over to a Pokemoto near you and you will find the menu will certainly be right for your stomach. Since forming Sadot, GRIL has seen a rise of 188% in share price while continuing to be undervalued based on current revenues. Will GRIL be able to sustain success, or is this just a flash in the pan?

About Muscle Maker Grill Inc.

Muscle Maker, Inc. is the parent company of “healthier for you” brands delivering high-quality healthy food options to consumers through traditional and non-traditional locations such as military bases, universities, delivery and by direct-to-consumer ready-made meal prep options. Brands include Muscle Maker Grill Restaurants, Pokemoto Hawaiian Poke and SuperFit Foods meal prep. The menus highlight healthier versions of traditional and non-traditional dishes and feature grass fed steak, lean turkey, chicken breast, Ahi tuna, salmon, shrimp, tofu and plant-based options. For more information on Muscle Maker, Inc., visit www.musclemakergrill.com, for more information on Pokemoto visit www.pokemoto.com or for more information on SuperFit Foods visit www.superfitfoods.com.

About Sadot, LLC

Sadot is a wholly owned subsidiary of Muscle Maker, Inc. Sadot’s goal is to create a comprehensive , global food company that stretches from sustainable farming, agricultural commodity shipping and trading, distribution, production and ultimately reaches consumers through our restaurant, franchise and meal prep companies. Sadot currently focuses on international agricultural commodity shipping and trading for items such as soybean meal, wheat and corn. Shipments are via commercial cargo ships that can range between 25,000 to 75,000 metric tons.

Forward-Looking Statements

This press release may include “forward-looking statements” pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “should”, “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Muscle Maker, Inc., does not undertake any duty to update any forward-looking statements except as may be required by law.

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