CORAL GABLES, FL / ACCESSWIRE / January 4, 2016 / DailyStockReporter.com, an industry leader in market reports and investor opinions is issuing an immediate update to its outlook for restaurant stocks in 2016--There has been no question that Restaurant stocks have seen a shakeup since talks of a new, much higher minimum wage have echoed in all corners of the market. Despite many restaurant stocks underperforming during the last quarter of the year, analysts and investors including those at DailyStockReporter.com are of the mindset that restaurant companies will be looking to expand in areas that are less affected if not affected at all by outliers like the "Fight for 15"; with regard to the national uproar surrounding an across the board minimum wage increase to $15 per hour, which includes tipped employees.
Franchises like the Darden Restaurants (NYSE: DRI) and even Buffalo Wild Wings (NASDAQ: BWLD) have been cautious when it comes to expansion efforts. In fact, campaigns to increase the minimum wage for restaurant employees to $15 an hour were a major contributor to shares falling this year based on the impact it could have on profit margins. Shares of Darden Restaurants, (Olive Garden, Longhorn Steakhouse, Bahama Breeze), Ruby Tuesday, Inc. (NYSE: RT) and even Brinker International (NYSE: EAT) who owns brands like Chili's Bar and Grill have all seen a decline in price during the end of 2015 based in part by fears of this impact the proposed minimum wages would have on the bottom line.
The need to become familiar with state regulation becomes very important for investors especially when looking to take advantage of the discounted prices many restaurant stocks and bar & restaurant stocks have seen. The state of Florida has been a hotbed of discussion considering the huge hospitality industry in places like Orlando, Ft. Lauderdale, Miami, and the Florida Keys. Being that technically, the Florida minimum wage only goes up if a specific economic indicator (http://www.orlandosentinel.com/business/brinkmann-on-business/os-florida-minimum-wage-20151019-post.html) goes up over the past 12 months, the state has not elected to increase its minimum wages.
Taking advantage of this move, Grey Fox Holdings Corp (OTC: GFOX) has targeted a popular Florida-based burger bar brand, Graffiti Junktion American Burger Bar and execute a franchise agreement that would open its own series of Graffiti Junktions. The company intends to open 4 locations within the next eighteen months. Graffiti Junktion is set in a casual atmosphere and is the empitome of what an American Burger bar should be. They serve 100% Angus Beef burgers that are hormone and antibiotic free with an "all fresh, never frozen" model.
Menu items range from nachos to their award winning burgers. Their mix of "extras" and burger meat have put Graffiti Junktion in many top ten categories over recent years including a rating in USA Today's 10 Best, Orlando's Best "Non-Chain" Burger, and even amongst the best of Orlando's Sports Bar rankings. All can be seen on the Graffiti Junktion site (http://graffitijunktion.com/press-awards/).
According to the National Restaurant Association's 2015 Restaurant Industry Forecast (https://www.restaurant.org/Downloads/PDFs/News-Research/research/ForecastExecSummary2015-FINAL.pdf), the restaurant industry will reach record-breaking numbers. More specifically, the industry is expected to generate over $709 billion in sales. The positive outlook is that growth is likely going to speed up and will be the sixth year in a row that there has been sales growth in the restaurant industry. Also, restaurants are likely going to be the country's primary job creator. "The restaurant industry will outpace total U.S. job growth for the 16th consecutive year in 2015," reads a statement in the report, with Florida projected to grow over 22% from 2015 to 2025.
For Grey Fox, timing could be ideal as growth projections, franchise location, and its relationship to rising minimum wages--or lack thereof--play their parts in the future growth of the company. Earlier this year through a previous transaction, Grey Fox (OTC: Gray Fox) acquired DB Capital Corp and in doing so, now has ownership in two Graffiti Junktion Restaurant locations in Lake Mary, FL and Thornton Park, Orlando, FL. Graffiti Junktion currently has thirteen open locations and Grey Fox aims to build that by at least 30% within the next 18 months.
This growth is no secret to the street either and many investors, especially in January, are sifting through industry hopefuls to find early opportunities on restaurant stocks to put into their portfolios in 2016. With positive growth projected industry-wide and the subdued impact Florida restaurants could see in the near term with regard to minimum wages gouging bottom line performance, we're considerably in favor of Grey Fox Holdings through their focus on expansion of the Graffiti Junktion franchise over the next 18 months.
Besides the companies mentioned above, other larger and formidably comparable, higher priced restaurant stocks like Ignite Restaurant Group (NASDAQ: IRG) and even RCI Hospitality Holdings (NASDAQ: RICK) have seen short term rebounds in price appreciation and volume in comparison to previous months due to returning interest within the space. Grey Fox is at the early stages of expanding a healthy franchise brand in the state of Florida and with a low cost to entry as compared to other franchised opportunities, each restaurant could yield compounded revenue growth as Grey Fox opens new locations over the next year and a half. Investors can gain more information via our full investor profile and the opportunity the company has in the very near term at DailyStockReporter.com
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