After a slow start to the year, Generation Next Franchise Brands Inc. (OTCMKTS:VEND) has exploded and in the process affirmed its breakout status in the smallcap space. Over the past one month, the stock has rallied by more than 100%, as investors reacted to a string of positive news and developments on the execution of the company’s business strategy.
The rally has been driven by a high turnover in shares an indication of growing investor confidence in the company’s ever-growing franchise business.
In our view, any pullbacks after a steep rise in share price should act as unique entry positions for investors who missed out on the initial run. A look at the chart above, it is clear that pullbacks may be limited to the $1.60 handle, seen as a key support level from which the stock is expected to attract buyers.
What Does Generation NEXT Franchise Brands Do?
Generation NEXT Franchise Brands is a franchise development company. The company operates vending machines and micro markets in North America, Bahamas and Puerto Rico. It currently operates over 2500 vending machines and micro markets that provide natural organic food and average products.
Catalysts behind Recent Stock Rally
Generation NEXT Franchise Brands outlook on Wall Street received a boost on its franchise subsidiary, Reis & Irvy’s, signing a record $23 million franchise contract. Pursuant to the agreement, local investor and entrepreneur, Nassim Bayat will have exclusive rights to the subsidiary’s locations, throughout Orange County and Los Angeles.
Reis & Irvy’s has already pre-sold over 1,000 units of the froyo robot worth over $40 million in deferred revenues. The robots are designed to deliver frozen yogurt, ice cream, gelato and frozen ice within 60 seconds.
“Reis & Irvy’s is just the first application of our patented robotics designed for brick-and-mortar retail disruption,” said Nick Yates, Chairman, and Founder of Generation Next Franchise Brands. “We selected Nassim Bayat for his track record of success in every business he’s been involved with to demonstrate the strength of our technologies in both Orange County and Los Angeles and couldn’t be happier with this partnership”
The franchise agreement for Los Angeles and Orange County is a further testament to Generation Next Franchise Brand’s growing franchise business. The company has since set its eyes on expanding its operation footprint on international markets.
By taking advantage of both domestic and international sales opportunities, in the form of franchising and licensing, the company hopes to expand its business, in pursuit of more revenue opportunities.
In addition, Reis Irvy’s has inked a sponsorship agreement and partnership with the Dallas Stars. The agreement paves way for the company to install a number of robotic vending machines in four Dr. Pepper StarCenter facilities in four Dr. Pepper StarCenter facilities.
Having robots installed in Dallas stars facilities presents yet another unique revenue generation opportunity given the tremendous exposure to fans and customers that come to watch games.
“Our goal is to support each and every one of our franchisees by placing their robots within the best possible locations giving them the ultimate chance to succeed. Now we are providing Dallas Stars fans and Dr. Pepper StarCenter patrons with an amazing froyo experience, while also sponsoring an exciting NHL team. This represents our vision for the perfect synergy between franchisee and location,” said Mr. Yates.
In an attempt to provide customers a wide range of payment options, Reis & Irvy ’s will start accepting cryptocurrencies payment for a range of frozen yogurt and ice cream consumables. The company’s vending robots will accept several cryptocurrencies including Bitcoin BTC, Bitcoin Cash BTHM Litecoin LTC, and Ethereum ETH.
According to the Chief Executive Officer, the new payment options will allow the subsidiary to generate more revenue as cryptocurrencies become mainstream.
Generation Next Franchise Brands has also entered into a string of partnerships as it continues to explore ways of expanding its business. In January, the company entered into an agreement with a global leading frozen yogurt maker, Dannon YoCream.
The yogurt maker is to provide premium frozen yogurt consumable to the company’s franchise concept Reis & Irvy’s. Dannon is to become the company’s primary supplier of all frozen dessert as the franchising subsidiary moves to install vending machines in over 500 locations.
The franchise development company followed the agreement with another supply agreement with Wisconsin-based manufacturing company m Stoelting Foodservice. Stoelting has agreed to provide premium soft serve technology and national service to Reis & Irvy’s.
What Next For Generation Next Franchise Brands
Generation Next Franchise Brands rise to stardom among small caps has not come as a fluke. The company has achieved significant milestones as it continues to strengthen its franchise business. A steep rise in share price is a testament to investor’s growing confidence in the company’s proven business model. The stock should continue powering high as the management continues to execute and deliver on all fronts.
Disclosure: We have no position in VEND and have not been compensated for this article.