Giggles N’ Hugs (GIGL) is a Fast Casual in Fast Forward Mode
California’s four-year drought should desiccate customer traffic, the way it has the streams and rivers, for restaurants like Giggles N’ Hugs (OTCQB: GIGL). As CEO Joey Parsi explained in a recent interview with QualityStocks, good weather is bad news for restaurants, since, when the weather is good, people do ‘outdoorsy things’. Despite the call of the outdoors, Giggles N’ Hugs saw its revenues increase. Sales were up about three percent in spite of the weather. Giggles N’ Hugs is a chain of fast casual restaurants with healthy menu options, a fun family atmosphere and, of course, plenty of giggles and hugs.
A story (https://dtn.fm/NDaL2) in Nation’s Restaurant News explained ‘Why Fast Casual is Eating the Industry’s Lunch’ by looking at Chipotle Mexican Grill (NYSE: CMG), Panera Bread Co. (NASDAQ: PNRA), Five Guys LLC, and Shake Shack (NYSE: SHAK). Another story (https://dtn.fm/1bL8v) in Forbes quotes industry analyst Technomic’s ‘2014 Top 500 Chain Restaurant Report’, noting that ‘sales for fast casual chains grew by 11% and store count by 8% in 2013’. The fastest of the fast casuals has been Chipotle which has had revenue growth of around 20 percent for the past five years. Yet another story (https://dtn.fm/M1T6x) in the Washington Post, titled ‘The Chipotle Effect: Why America is obsessed with fast casual food’, with data from market research firm Euromonitor, reports that Americans spent over $21 billion at fast casual restaurants in 2014. The Washington Post also asks what the fast casual category is. A major characteristic seems to be the price point. The average tab for a regular fast food outlet is $5; for a fast casual it is much higher, ranging from $9 – $13.
Technomic has identified ten other factors that may play a part in customer perception: overall food quality, better ingredients, wholesome food, a perception of freshness, sophisticated dcor, fast service, fair prices, friendly staff, flexible offerings, and a view of the food preparation area. These are exactly the sort of things you will find at any one of Giggles N’ Hugs’ three restaurants.
Giggles N’ Hugs offers an organic, gluten-free, menu with vegetarian options. All produce is grown locally with organic ingredients when available. The beef comes from grass-fed cows to which no hormones have been administered. Breads are made fresh daily by local artisan bakeries. At Giggles N’ Hugs, there are no leftovers; meals are prepared from scratch daily to ensure freshness. The cooks use only trans-fat free canola oil and extra virgin oil, when necessary.
The Giggles N’ Hugs menu offers appealing appetizing adventures. To start the day, you can have Caprese, a delightful concoction of ripe tomatoes, basil and fresh buffalo mozzarella drizzled with olive oil, balsamic glaze, salt and pepper, or, perhaps, the Citrus Tuna Salad, made with citrus mayo, almonds and raisins served over a bed of organic mixed greens and shredded organic heirloom carrots tossed in lime vinaigrette. For lunch, there is the Chicken Breast Parmesan, which includes grilled or breaded chicken breast topped with house-made marinara sauce, melted mozzarella and parmesan cheese that’s served with spaghetti marinara. Giggles N’ Hugs only uses all-natural chicken.
According to a research report published by Duff & Phelps entitled Restaurant Industry Insights 2015, chicken is the new ‘burger’. The reports details that, in 2013, ‘Chick-fil-A surpassed Kentucky Fried Chicken (KFC) as the top chicken fast food chain with sales of $5.0 billion compared to KFC’s $4.2 billion. This is despite KFC having more than double the number of U.S. stores (4,491) than its Atlanta-based rival (1,775). The driving factor behind Chick-fil-A’s success is actually quite simple: the chicken sandwich. Chick-fil-A doesn’t serve processed chicken patties like its fast food competitors do.
The financial menu at Giggles N’ Hugs is equally attractive. An investment report by the Small Cap Network says the projected payback period on a new store’s initial investment is only about 2.14 years. EBITDA margin after four years of a new store’s operation is expected to be close to 18 percent of sales. From an investment point of view, Giggles N’ Hugs looks very palatable.
Learn more by visiting www.gigglesnhugs.com
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