Frisch’s Restaurants, Inc. (NYSEMKT:FRS) enjoyed a very quiet session as the stock ended the last trading session with a minor gain of 0.24%. The volume of the day at 22,000 was much higher than the daily average of 7,000 but these two numbers clearly indicated the illiquid nature of the stock. The daily ranges of the price are very narrow as the volatility of the stock is very low. It has recently enjoyed a major breakout from a long term base built over many months. The breakout gap can be expected to provide support in the coming days.
Aziz Hashim, the new owner of Frisch’s Restaurants, Inc. (NYSEMKT:FRS) said that the company will continue to serve its signature dish Big Boy hamburgers and hot fudge cakes, and will assess its Pepsi contract. Hashim, the initiator of NRD Capital Partners, which acquired Frisch’s for $175 million, stated his recipe for expanding the iconic restaurant chain is nurturing the product that turned it an admired local brand. He plans to franchise new Big Boys brand in underdeveloped segments.
The new owner of Frisch’s said that they have incredible respect for customers’ loyalty and they intend to make the Frisch’s brand better for customers. He added that his Atlanta-based investment fund will study customers’ preferences and operations to enhance the menu and boost sales.
After early interactions with customers and wait staff, the new ownership is considering providing appetizers. NRD will assess Frisch’s 17-year contract with Pepsi and reevaluate if it is worth and possible to switch back to Coke. The company will review the contract and see what pending obligations are and what customers expect from them.
The future ahead
The biggest challenge ahead is to the Frisch’s growth strategy. The new owner plans to switch from corporate-owned eateries to having more franchised outlets. Frisch’s owns and manages 95 Big Boys outlets in Ohio, Indiana and Kentucky, while it franchises twenty-four other locations.
Hashim stated that by the end of next year, they would prefer to set 4 to 6 units, expanding in Tennessee and Indiana. Boosting store growth will consume time as Frisch’s has to explore both potential real estate and new franchisees. Franchising is company’s growth vehicle and the other changes have been implemented. To support the acquisition deal, a number of Big Boy assets have been sold and leased back to company. The management already closed underperforming outlets in recent years.