Summary
- Muscle Maker has filed initial information for its U.S. IPO.
- The firm operates a network of corporate-owned and franchised fast casual restaurants located primarily in the U.S.
- MMB hopes to use the IPO funds for expansion, but its financials indicate revenue contraction, continued operating losses and increasing cash use in operations.
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Quick Take
Muscle Maker (MMB) has filed to raise $7 million in an IPO of its common stock, according to an S-1 registration statement.
The firm operates a network of fast casual dining restaurants located in 14 U.S. states and in Kuwait.
MMB is experiencing contracting revenue, continued operating losses, and increasing cash burn from operations.
Company & Technology
Burleson, Texas-based Muscle Maker was founded to create a corporate-owned and franchise concept network of restaurants, branded Muscle Maker Grill, providing what it calls 'healthy-inspired' food options for guests. Most of the meals are made-to-order lean, protein-based meals, including chicken, seafood, hamburgers, wraps and options include salads and protein shakes.
Management is headed by Chairman and Chief Investment Officer Kevin Mohan, who has been with the firm since April 2018 and was previously VP of Capital Markets for American Restaurant Holdings. In addition, Michael Roper is CEO, and was appointed to his position in May 2018. Mr. Roper has significant experience in the fast casual industry in senior positions.
Below is a brief overview video of Muscle Maker:
Source: Muscle Maker Grill
The company’s primary offerings include:
- Lunch
- Dinner
- Catering
- Breakfast in select locations
Muscle Maker has received at least approximately $23.3 million from investors, including John Feeney, Catalytic Holdings, and Thoroughbred Diagnostics.
Customer Acquisition & Market
The company seeks to increase its footprint in what it calls 'non-traditional locations such as universities, office buildings, military bases, and other locations and franchise growth by expanding in existing markets, especially in the Northeast region of the United States.'
MMB intends to open additional locations through a combination of corporate-owned properties and franchise-operated locations.
The company does not provide sales and marketing costs in detail, so there was no way to calculate the firm’s efficiency in this regard
According to a 2019 report by Skift Table, the fast casual and quick serve dining markets in the U.S. are forecast to reach $246.7 billion in 2019.
This represents a forecast 3.2% over the previous year's results.
The main drivers for this expected growth are increasing investment available for fast casual chains from private funding sources and legacy full-service chains experimenting with fast casual spinoffs.
Management says its concept is 'iconic and unique, aimed at fitness enthusiasts but with options for guests not so inclined.
