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Generation Next Updates 2020 Forecast

VEND

 Details Shared from Recent Update to Reis & Irvy’s Franchise Network

SAN DIEGO, Sept. 19, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Generation Next Franchise Brands, Inc. (OTCQB: VEND) updated its projection for the current fiscal year revenue to range between $30 and $40 million with most of that revenue being recognized during the second half (January – June 2020).

Earlier this month the Company announced an investment banking engagement with Stout Risius Ross Advisors, LLC (“Stout”) to advise and assist on potential financing and strategic opportunities. Generation Next interim CEO, Ryan Polk, noted that the Company is updating its fiscal year 2020 estimate to account for any risks to production due to the Company’s tight control of cash while management and Stout evaluate the various financing alternatives.

The Company also announced it has ended its contract manufacturing relationship with Flex and is ready to begin production with new partners. “While working on the migration from Flex to Stoelting, we concluded that additional companies should be included in the discussion. This has turned out to be a good decision and we have narrowed our options to two contract manufacturers. One of these companies has been working extremely hard and fast to launch a production line for the Reis & Irvy’s kiosk. Manufacturing a high volume of units per month is what people have always expected from this company and it is my responsibility to meet this expectation, but proper financing and quality control must be achieved before ramping volume.” Polk indicated more detailed updates on this will be provided in the coming weeks.

Polk explained that Generation Next leadership is taking a conservative approach toward investing in inventory and ramping production while the Company secures new capital. Until then, the Company will support a low level of new kiosk production by supplementing its existing inventory of $4 million in components with a small amount of new part purchases to fill in gaps as needed. Additionally, Generation Next has accumulated 160 fully assembled kiosks which it will use for installations in highly qualified locations during this transition period.

Generation Next also summarized a list of company priorities which Polk discussed in a letter to the Reis & Irvy’s franchisees.  

  • Building the Reis & Irvy’s Brand – The Company summarized its plans to build Reis & Irvy’s into one of the most dominant soft-serve brands by 2021 through its unique location network, broad product offering, and data driven consumer marketing programs. Generation Next indicates it will also have a loyalty program and new Reis & Irvy’s app launched during the second half of 2020.

  • Focusing on Quality Locations – Earlier this year, Generation Next shared it was using data gathered from the initial round of installations to secure locations with the highest probability for higher soft-serve sales. The top six categories prioritized by the Company are airports, hospitals, hotels & resorts, large retail stores, museums, and travel centers. Agreements have been reached on a national level for airports, hospitals and large retailers. Conversations and pending agreements are in place with leading decision makers in the other categories. During July and August daily sales in these six categories were 107% higher than sales in the other location categories. As of September 13th, 2019 Reis and Irvy’s kiosks have sold over 800,000 cups of frozen yogurt generating $4,000,000 in retail sales for franchise owners.
  • Working with Dannon YoCream on Product Development - YoCream and Generation Next are planning the introduction of soft serve ice cream in addition to frozen yogurt. Franchise owners of Reis & Irvy’s unattended retail kiosks will have the option of serving these new products throughout 2020.

  • Restructuring the Company for Profitability and Expanded Governance - The internal restructuring is complete and estimated to reduce annual operating expenses by a minimum of $3 million. Progress is also being made on the nomination of a third independent Director for the Board.  

  • Increasing Kiosk Cash Flow - The Company repeated its intent to focus on the quality of kiosk operations by franchise owners including optimizing the site of each Reis & Irvy’s installation and training on how to create and activate consumer awareness.

  • Adding International Reis & Irvy’s Licensees – East Asia and the Middle East are the two territories the Company is targeting for new Reis & Irvy’s licensees. This initial global push is expected to generate commitments for 3,000 to 5,000 kiosks, worth between $100 million and $200 million of revenue with most deliveries occurring in 2021 and 2022 from an Asian manufacturing facility.

  • Launching a Company Owned and Operated Network – A limited number of large-scale location agreements are being negotiated which would require Generation Next to own and operate the kiosks. If these agreements are executed, the deployment of company owned and operated kiosks into these locations would begin during 2020.  A structure is also being considered that would allow franchise owners to partner with and take advantage of the corporate operations.

Polk summarized his comments to the Reis & Irvy’s franchisees by saying, “Since its inception our team has charted new territory in unattended retail. Looking back, you can see the progress made from the Robofusion concept acquired in December 2016 to the creation of a platform capable of delivering frozen soft-serve on a mass market scale around the world.  The value creation opportunity is stronger today than yesterday because of the knowledge gained and the relationships built during this journey. Let’s execute well on what needs to be done today and keep a long-term perspective on building the Reis & Irvy’s brand.”

For more information, visit Generation NEXT Website: www.gennextbrands.com or call Toll-Free (888) 902-7558.

About Generation NEXT Franchise Brands, Inc.
Generation NEXT Franchise Brands, Inc., based in San Diego, California, is a publicly traded company on the OTC Markets trading under the symbol OTCQB: VEND. Generation NEXT Franchise Brands, Inc. Is the parent company to Reis & Irvy’s, Inc. Print Mates, Inc. and 19 Degrees, Inc.

About Reis & Irvy’s, Inc.
Reis & Irvy’s, Inc. is a subsidiary franchise concept of Generation NEXT Franchise Brands, Inc. (VEND). Launched in early 2016, the revolutionary Reis & Irvy’s Vending Robot serves frozen yogurt, ice cream, sorbets and gelatos, and a choice of up to six custom toppings  
www.reisandirvys.com.

About Stout
Stout is a global advisory and consulting firm specializing in Investment Banking, Valuation Advisory, Dispute Consulting, and Management Consulting. Stout serves a range of clients, from Fortune 100 corporations to privately held companies in numerous industries around the world. Stout’s Investment Banking group specializes in providing mergers and acquisitions (M&A) advice, private capital raising, and other financial advisory services to public and private companies. Learn more at stout.com.

Stout is a trade name for Stout Risius Ross, LLC, Stout Advisors SA, Stout GmbH, Stout Bluepeak Asia Ltd., and Stout Risius Ross Advisors, LLC, a FINRA-registered broker-dealer and SIPC member firm. The terms "Stout" or the "firm" refers to one or more of these independent advisory practices.

This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. No Reis & Irvy’s franchises will be sold to any resident of any state until the offering has been exempted from the requirements of, or duly registered in and declared effective by, such state and the required FDD (if any) has been delivered to the prospective franchisee before the sale in compliance with applicable law. Currently, the following states in the United States regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you reside in one of these states, or even if you reside elsewhere, you may have certain rights under applicable franchise laws or regulations.

Cautionary note on forward-looking statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance, including statements regarding: our ability to generate revenue and recognize deferred revenue; our ability to timely launch delivery and installation of our frozen yogurt robots; and our ability to grow our franchising and licensing divisions and launch our corporate-owned and direct sales platforms. The Company bases these forward-looking statements on its current expectations, estimates and projections about future events and the industry in which it operates using information currently available to it. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as “believe,” “anticipate,” “propose,” “expect,” “intend,” “plan,” “will,” “may,” “estimates,” variations of such words and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended June 30, 2018, our Quarterly Reports, and our Current Reports on Form 8-K. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated and the Company is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

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