BUFFALO GROVE, Ill., April 13, 2005 (PRIMEZONE) -- GFY Foods, Inc. (OTCBB:GFYD) became a publicly traded company in January of 2004 and started operating Frullati cafe franchises in health clubs located in Buffalo Grove and Willowbrook, Illinois, and Elkhart, Indiana. It acquired its newest location in the World Gym Palatine, Illinois. This new cafe, named World Cafe, is a private venture, not subject to an outside franchiser. Originally, GFY Foods had planned on committing itself solely to owning these small units. The company felt that there was a lack of high-quality foods at affordable prices as healthy alternatives to food that is now being sold to the American public. The Company has recently shifted its focus to incorporate new and larger revenue centers and CEO Ed Schwalb prides himself on his flexibility in his corporate vision. As new and larger profit opportunities became apparent, the company began adjusting its course to include those.
GFY Foods has re-thought its ownership of the types of franchises with which it started. Although profitable, these small franchises could not generate enough profit to sustain a larger corporation. As the Company grows, it wants to shift its sights on new horizons. It is currently finalizing contracts to release the Willowbrook location, it has released its Elkhart location, and it is finalizing a deal to sell the World Cafe in Palatine. The World Cafe menu focus of quick-service, Latin and Caribbean food is a nitch that GFY Foods, Inc. believes it can market as a franchise opportunity. The Company is currently in initial talks with some of the necessary management regarding the possibility of implementing this plan.
Food-service franchising is a $300 billion business, and franchising in general has a reported growth rate of 10-12% each year. Today, it is estimated that there are around 1,500 franchises whose franchisees operate virtually every business sector from fast food to environmental services to computer education. These range in size from the small cafes that GFY was focused on, to the large, well-known fast food outlets. However, the largest franchisers in the market still only account for about 9% of the total of franchised businesses. Therefore, the Company believes that there are plenty of arenas left for a small start-up venture.
Franchised businesses are gaining in popularity as a great opportunity for people who want to be in business for themselves, but who don't want to start from scratch. About 80% of franchise offers call for a start-up cost of approximately just under $250,000.00. The Company estimates that a lower initial cost may attract more franchisees, and that may lead to increased profit for GFY Foods. By finding existing but idle build-outs in health clubs or seasonal attractions, such as public pools and water parks, the up front costs may be diminished substantially. The Company would charge an initial franchise fee to be determined later, but estimated as between $5,000.00-$10,000.00, and collect a monthly royalty fee based on revenues.
Outside of its own franchising, GFY Foods Founder and President, Ed Schwalb, feels that there are plenty of small businesses in the food or retail or service based arenas, which can be acquired for relatively small amounts of capital. These businesses are simply in need of fresh ideas, management and marketing. GFY Foods believes that it could put those things in place, and then have a successful business to sell for a good profit. This will be one focus of the company in the future. The goal will be to invest a small amount of capital, build a better business through smart, strategic moves, and then have a high-quality business to sell.
Ed Schwalb is confident that he has found a good base of management and PR teams to carry out such a plan. Jason Loebig, a former Area Manager for a large restaurant chain, and having over ten years of experience in the business, is just such a person. He plans on being able to re-work any small restaurant, cafe or quick-service location to be clean, energetic and profitable. He is also fully capable of heading up the management team GFY Foods would need should it proceed with its franchising plans.
Our company accountant, Terry Moye, is very versed in what financial base a restaurant or retail business needs to be profitable. His due-diligence work prior to any acquisition should give the Company a very good prediction of how successful it may be in a particular business deal. He would also be a key player in determining what sites would be a good and profitable fit should GFY Foods move forward as a franchiser. Mr. Moye and Mr. Loebig's services should prove invaluable when put to full use.
In addition, Mr. Moye's accounting firm is ready to align itself fully with GFY Foods as a wholly owned subsidiary of the Company. While he will focus upon the Company's needs, it is also expected that his base of private clientele will provide yet another revenue source for GFY Foods. It is planned that Moye & Associates will become a fully capable Financial Services branch of GFY Foods, Inc. Mr. Moye, a licensed CPA, is also taking steps to renew his license to provide insurance and mutual fund brokerage services. He will be able to provide Mutual Fund investments, retirement planning, individual tax services, and Business Continuity Planning. Mr. Moye further plans to bring in associates that will broker medical and life insurance policy accounts.
This is only one step in the Company's plan to get involved with financial services in its attempts to diversify. It has researched Life-Settlement policies, or viaticals, and the Company feels that careful investments in these policies will reap a steady revenue stream in the future. A viatical settlement involves the purchase of a life insurance policy from someone who is terminally ill. This allows the seller to use the money received in any way he or she deems fit while still alive. Viaticals are not a stock market product and offer fixed, total returns of up to 42% based upon estimated life expectancies of up to three years. As an investor, GFY Foods must weigh the risk to reward ratio of investments and viaticals and life settlement programs that offer purchasers fixed, total returns stand up well. The Company understands that there are pitfalls in these types of investments, but it believes that its advisors are knowledgeable enough to help direct the Company in the right way.
Looking forward to other opportunities, GFY Foods has surrounded itself with staff and advisors who possess talents and expertise in the realm of the Real Estate business. It is in the process of signing a Consulting Agreement with John DeSimone to assist it in finding property acquisitions. Mr. DeSimone has his own portfolio of rental properties, is well versed in what is involved in closing a real estate transaction, and is in contact with trusted real estate brokers. The Company's goal is to purchase pre-occupied rental properties, real estate foreclosure acquisitions, and the possibility of renovating and re-selling properties. GFY Foods believes that Mr. DeSimone is the right individual to be able to convert, manage and assist in the re-sale of these properties. The Company has two contracts for rental property in Batavia, Illinois and Buffalo Grove, Illinois. The Real Estate and Financial Services businesses were not a focus for GFY Foods when it started back in 2004.
The company is surrounded by people with varied and useful backgrounds, and would have been remise in not utilizing their talents to the fullest. This is exactly what is being put in place now. GFY Foods sees itself as being in the starting gate for a better, more informed attempt at growing itself through profitability, management and diversity. Further, the Company is working hard to pay off its past debts and streamline its workforce.
The Company believes that it is poised with the talents needed to move ahead and be profitable in the areas of real estate, financial services and the restaurant industry. In order to broadcast its new focus and philosophy, GFY Foods, Inc. will be taking steps to change its name to GFY Holdings, Inc. It has been advised that this process can take several months, however, so it will be continuing to do business as GFY Foods, Inc. for the time being.
Mr. Schwalb hopes that 2005 will be looked upon as an exciting year for the Company. It is hoped that this year will bring more profitability to the Company and make it a solid investment for the future. If all goes as intended, GFY Foods believes that it is on the cusp of rapid and successful growth.
This release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the company's current views with respect to future events that involve risks and uncertainties including uncertainties related to successful negotiations with other parties, closing of transactions, capital availability, operational and other risks, uncertainties and factors described from time to time in the company's publicly available SEC reports. In light of these risks and uncertainties, the forward-looking events described in this release might not occur.