Annual Shareholder s Meeting. July 7, 2017

Transcription

1 Annual Shareholder s Meeting July 7, 2017

2 A review of the company s business strategy and summary of developments within the last 12 months. Brief Overview of the Company s Business Model Developments in Non-Traditional Venues Developments in Stand-Alone Venue Overview of Industry Commodity Price Trends 2

3 Two Growth Venues Non-Traditional Franchising & Licensing Grocery Deli Department Take-n-Bake Licensing Convenience Stores Entertainment Facilities Department Stores (Wal-Mart) Hospitals Other Non-Traditional Locations Stand-Alone Unit Development Company Owned and Operated (to be 4 Units) Franchise Owned and Operated (Primary Growth) 3

4 Typically Located in a Host Facility Whose Principal Business is Other than a Restaurant Adding Pizza-Focused Food Sales As a Revenue Center As a Facility Draw As an Employee Benefit Usually the Host Facility Owner is also the Franchisee or Licensee, but not Always Noble Roman s Product Line Adoption May be Simple to Elaborate Depending on the Application 4

5 Example Types of Locations Grocery Deli Departments Convenience Stores Walmart / Retail Centers Entertainment Facilities Bowling Centers Hospitals Military Bases 5

6 Supply Agreements with Grocery Distributors Purchase Noble Roman s Ingredients from Foodservice Distributors Sell Ingredient to Approved Grocery Stores Licensing of Individual Groceries to Sell Noble Roman s Pizza Pizzas are Assembled Fresh Daily in the Grocery Deli Does Not Come Pre-Assembled Delis Assemble Pizzas from Standard Noble Roman s Ingredients Take-n-Bake Pizzas are Merchandised in Customer Accessible Coolers in the Deli Area 6

7 Hot Program Add-On Bake Full-Sized Pizzas on Site Serve Hot Pizza by the SuperSlice Custom Pizzeria Add-On Make Custom Pizzas to Order at the Deli Counter Either for Take-n-Bake or Baked In-Store 7

8 1/4 th of a Medium Pizza 8

9 Lake Mills, WI Sorrento, FL Montgomery, AL 9

10 NRI has No On-Going Direct Relationship with Grocers Cannot Use the Royalty System Common with Franchising Grocery Distributors Pay a Product Premium When they Purchase Noble Roman s Ingredients This Product Premium is Paid as Part of the Ingredient Price to NRI Foodservice Distributors Referred to as Fee in Lieu of Royalty and Held in Trust by the Foodservice Distributors Remitted to NRI on a Monthly Basis 10

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12 Sacramento, CA South Bend, IN Chowchilla, CA 12

13 Lancaster, SC 13

14 Royalty Percentage of Sales Paid weekly by ACH Majority of Units Work this Way Fee in Lieu of Royalty Added to Price of Ingredients Collected as NRI Trust Funds by Distributors Remitted to NRI Monthly Franchisee Opts for this Arrangement Based on Structure NRI Opts for this Arrangement if Previous Royalty Collection Issues 14

15 LED Backlit Bulkhead Signs LED Backlit Menu Board LED Backlit Counter Sign Warmer Mounted Promo TV Display Up-Front Ordering for Custom Pizzas Up-Front Production Area 15

16 Russellville, KY 16

17 Prospective Site Schematic: Woodinville, WA 17

18 Complete Program: $29,546 Investment Includes: All Equipment All Restaurant Smallwares Complete LED Signage Package Point of Sale Advertising Materials Start-Up Marketing Program Franchise Fee Based on estimated equipment and other costs as of 6/30/17; does not include such items as internal remodeling or counter costs, etc. 18

19 Total Number of C-Stores in US Grew to 154,535 in % of C-Stores are Owned & Operated as Single Units C-Store Foodservice Sales Grew 7.0% Overall in 2016 Will Remain a Key Venue Target for NRI Growth Source: NACS Daily & National Association of Convenience Store Operators 19

20 Watch the Video Online at: 20

21 Approximately 4,000 Square Feet Dining Room to Seat About 150 Service System Designed for Speed & Manageability Counter Ordering with Dining Room Food Runners Large Screen TVs Showing Sports & Old Time Featurettes Nostalgia Modern Italian Décor with a Touch of Noble Roman s Nostalgia Beer & Wine Bar Glass Enclosed Dough Room Open Kitchen Dust & Drizzle Station For Customer Customization of Pizzas, Pastas & Salads Self-Serve Craft Root Beer Tap 21

22 Individual Pizza Peel Menus Screen Printed on Pine Hanging on S-Hooks from Metal Rods Throughout the Entry Customer Returns at Cashier 22

23 Glass Enclosed Focal Point Upon Entry Climate Controlled Computer Controlled Water Temperatures Dough Masters Intensive Training Process Apprenticeship Quarterly Practical Exam Tenure Requirements Special Lab Coats 23

24 Pizza Preparation in Full View of Guests Along Aisleway Oven Operation in Full View Fresh Salad Station in Full View of Guests Along Aisleway All Other Food Prep in Full View of Guests 24

25 Featuring Sprecher Craft Barrel Root Beer from Milwaukee Favorite with Kids (Adult Favorite, too!) CPP is the Highest Volume User in the State Approximately 1 Keg per Day 25

26 16 Beers on Tap 16 Beers by the Bottle 7 White Wines by the Glass or Bottle 8 Red Wines by the Glass or Bottle 1 Sparkling White Wine House Sangria Coolers Beer & Wine Flights 26

27 Cheeses Peppers & Salts Infused Olive Oils Spices Vinegar & Oils Hot Sauces 27

28 4,200 Square Feet Seating for 155 Bar Seating for 15 Booth Seating Solid Maple Block Table Modular Table Seating Open Ceilings Wall Murals 13 Large Screen TVs Old Standards Music 28

29 -VS- Craft Pizza & Pub Broader Menu Personal, Medium & Large Pizzas Extensive Beer & Wine with Bar Refined & Relaxing Dining Room Modern Interior with Entertainment Family Friendly Increased Dining Service More Flavorful Yeast Doughs True Deep Dish Crust Quick Service Pizza Concepts Limited Menu Individual Pizzas Only None or Limited Fast Food Ambiance No Special Appeal Not Appealing to Kids Self-Serve Only Low Yeast, Low Flavor None or Par Baked 29

30 -VS- CPP Menu Makes Dinner Timeframe Highly Productive vs Lunch Oriented Quick Service CPP Interior Design Features More Inviting for Lunch and Especially Dinner CPP Beer & Wine Bar Attracts Broader Demographic and Expanded Dining Occasion Possibilities CPP Product Quality and Topping Quantity Makes the Product More Desirable for Repeat Visits CPP Broader Menu Attracts Broader Demographic and Increases Dining Frequency 30

31 Quick Service Pizzerias Tend to Focus Only on Individual Pizzas Larger Pizzas Fit Customer Experience with Food Category Pizza for Dinner Traditionally a Social, Family Style Shared Event Availability of Larger Sizes Significantly Enhance Dinner Segment 31

32 Conveyor Ovens Offer Advantages Over Fixed Shelf Units Offer Much Higher Throughput Offer More Intensive Internal Baking Allow for Greater Electronic and Mechanical Customization Have no Recovery Time Require No Additional Training or Staffing Cook Large Pizzas as Well/Fast as Individual Pizzas Noble Roman s Utilizes Customized Conveyor Ovens Increases Velocity of Impingement Cooking Increased Efficiency of Bottom-Up Cooking Noble Roman s Pairs Oven Technology with Dough Recipes 32

33 OVEN BELT SPEED TIMES Traditional Thin Crust = 2 min 30 sec Deep Dish Sicilian Crust = 5 min 45 sec Breadsticks, Wings, Subs = 2 min 30 sec 33

34 EXCELLENT CUSTOMER APPROVAL RATING! 4 ½ Star Rating Since Inception 34

35 Social Media Management Quarterly Event Planning Daily In-House Corporate Supervision Contracted Social Media Management Company Social Media Management Company Guest Relations Responsive Social Media Interactions Facebook Followers Currently at Approximately 1, % Interactive Response Rate Also Actively Managing Twitter & Instagram Marketing Club Club Members (currently at approximately 900) Direct Same-Day Issue Resolutions Director of Corporate Communications President Director of Operations 35

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37 Contract with The BARS Program Undercover Auditors Aged Visit 2x per Month Evaluate Proper ID & Serving Procedures Record Date & Time of Visit and Server s Name Deliver a Green Pass Card or a Red Fail Card CPP Manager Rewards a Green Card with $20; Red Card Results in Termination Zero Tolerance Policy BARS Reporting Sent Electronically to NRI 37

38 Approximate Net Investment $545,000 Average Weekly Net Sales $36,539/wk Average Guest Check From Open to 4pm - $16.22 From 4pm to Close - $22.81 Average Beer & Wine Sales 11.8% Average Sales by Pizza Crust Traditional Crust 57.4% Sicilian Crust 42.6% Average Carry-Out Sales 22.9% 38

39 5 Month Financial Contribution to Noble Roman s, Inc. Total Net Sales $766,217 Contribution to NRI Operating Income $212,708 39

40 NRI Location Searches in Progress North Indy Cities & Suburbs Zionsville Fishers Carmel Noblesville Franchisee Currently Working on a Site in Evansville, IN Free Standing Building Starting Ground-Up Construction Week of July 12th 40

41 Sampling of Commodities Used by CPP from February June 2017 Commodity Item Pepperoni (beef & pork) Sausage Poultry Flour Cheese 5 Months Usage 546,000 Units 4,060 Lbs 2,575 Lbs 30,850 Lbs 19,230 Lbs 41

42 Last 12 Months Year-to-Date Last Month Beef % +24.2% +7.8% Pork +14.6% +69.6% +32.8% Chicken -0.8% -1.8% -21.1% Wheat +24.6% +59.0% +33.3% Source: on July 1,

43 Current & Historical $ per # (cheddar) $1.90 $1.927 $1.70 $1.680 $1.50 $1.513 $1.519 $1.372 $1.30 Last Year This Year 52-Wk Low 52-Wk High 10 Yr Avg Source: on June 30,

44 $2.50 $2.45 $2.40 $2.35 $2.30 $2.25 $2.20 $2.15 $2.10 Cost of 14" Pepperoni Pizza At 10 Yr Avg At $1.93/lb At $1.37/lb CPP Venue Estimates Using Indianapolis-Based Distributed Costs as of June 30,

45 Last 12 Months Year to Date Last 30 Days West Texas -6.6% -12.5% -6.2% Brent Sea -1.0% -11.2% -5.6% Source: on July 1,

46 Crude Oil 45% Federal & State Taxes 21% Refining Costs 18% Retail Distribution 16% Retail Gas Prices Move Approximately $.024 Per $1 Move in Crude Oil Prices Source: National Association of Convenience Store Operators; US Energy Information Administration, 2016 data. 46

47 Year Average Margin per Gallon Year Average Price per Gallon 2015 $.10 $ $.15 $ Current $.20 $2.23 (7/3/17) On average, it costs a retailer approximately $.12 to $.16 to sell a gallon of gas. Using the current gross margin of $.20, the typical retailer averages about $.06 per gallon in profit. (Retailer costs include credit card fees, utilities, rent and equipment amortization.) Source: NACS Daily & National Association of Convenience Store Operators; AAA. 47

48 The statements contained in this presentation concerning the company's future revenues, profitability, financial resources, market demand and product & venue development are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the company that are based on the beliefs of the management of the company, as well as assumptions and estimates made by and information currently available to the company's management. The company's actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the company s operations and business environment, including, but not limited to, market acceptance of current or future products, venues and brands (including envisaged new Craft Pizza & Pub concept), competitive factors and pricing pressures, non-renewal of franchise agreements, shifts in market demand, general economic conditions and other factors including, but not limited to, changes in demand for the company's products, franchises or licenses, the success or failure of individual franchisees and licensees, and changes in prices or supplies of food ingredients and labor as well. In addition, the company had no previous experience selling its products through retail grocery channels and there can be no assurance that grocers will continue to stock the company s pizzas or that customers will continue to buy them. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The company undertakes no obligations to update the information in this presentation for subsequent events. 48