Meritage Opens 50th Restaurant; Second O'Charley's Restaurant in
Michigan
GRAND RAPIDS, Mich., Feb. 9 /PRNewswire-FirstCall/ -- Meritage Hospitality
Group Inc. (AMEX:MHG), the nation's only publicly traded Wendy's franchisee and
the nation's first O'Charley's franchisee, today announced the grand opening of
its second O'Charley's restaurant located at 38703 Seven Mile Road in Livonia,
Michigan, a suburb of Detroit.
Commenting on the opening, CEO Robert E. Schermer, Jr. stated, "This restaurant
is an important milestone for the Company as it represents our first Detroit
metropolitan area store, our second O'Charley's restaurant, and Meritage's 50th
restaurant in operation. We anticipate opening two additional O'Charley's
restaurants in the metropolitan Detroit area this year. Our O'Charley's
development goal is to open a new unit every twelve weeks for the next several
years, similar to our recent Wendy's rollout in West Michigan. The Company's
opportunistic timing of sale and leaseback transactions involving a number of
our Wendy's restaurants has allowed us to strengthen our balance sheet by
paying down debt and increasing cash on hand, and gives us greater financial
flexibility in carrying out our O'Charley's development plans." Mr. Schermer added, "In our Wendy's business, we continue to experience solid
operational performance but our margins remain pressured by higher food costs.
We are hopeful that food costs will begin to ease in 2005 through system-wide
reductions in commodity costs and menu pricing of new introductions such as
fresh fruit bowls and new salad offerings." Meritage is one of the nation's premier franchise operators. The Company is
the only publicly held Wendy's franchisee, operating 48 "Wendy's Old Fashioned
Hamburgers" restaurants throughout Western and Southern Michigan and serving
more than nine million customers annually. Meritage has been one of the
fastest growing Wendy's franchisees within the Wendy's franchise system during
the past five years. Meritage is also the nation's first, and only publicly
held, O'Charley's franchisee. Meritage holds the exclusive right to develop
O'Charley's restaurants in the State of Michigan. Meritage opened its first
O'Charley's restaurant in Grand Rapids, Michigan and its second O'Charley's
restaurant in Livonia, Michigan.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995 Certain statements contained in this news release that are not historical facts
constitute forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, and are intended to be covered by the
safe harbors created by that Act. Forward-looking statements may be identified
by words such as "estimates," "anticipates," "projects," "plans," "expects,"
"believes," "should," and similar expressions, and by the context in which they
are used. Such statements are based only upon current expectations of the
Company. Any forward-looking statement speaks only as of the date made.
Reliance should not be placed on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements to differ materially from
those expressed or implied. Meritage undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after the date on
which they are made.
Statements concerning expected financial performance, business strategies and
action which Meritage intends to pursue to achieve its strategic objectives,
constitute forward-looking information. Implementation of these strategies and
achievement of such financial performance are subject to numerous conditions,
uncertainties and risk factors, which could cause actual performance to differ
materially from the forward-looking statements. These include, without
limitation: competition; changes in the national or local economy; changes in
consumer tastes and eating habits; concerns about the nutritional quality of
our restaurant menu items; concerns about consumption of beef or other menu
items due to diseases including E. coli, hepatitis, and mad cow; promotions and
price discounting by competitors; severe weather; changes in travel patterns;
road construction; demographic trends; the cost of food, labor and energy; the
availability and cost of suitable restaurant sites; delays in scheduled
restaurant openings; the ability to finance expansion; interest rates;
insurance costs; the availability of adequate managers and hourly-paid
employees; directives issued by the franchisor regarding operations and menu
pricing; the general reputation of Meritage's and its franchisors' restaurants;
legal claims; and the recurring need for renovation and capital improvements.
In addition, Meritage's expansion into the casual dining restaurant segment as
a franchisee of O'Charley's will subject Meritage to additional risks
including, without limitation, unanticipated expenses or difficulties in
securing market acceptance of the O'Charley's restaurant brand, the ability of
our management and infrastructure to successfully implement the O'Charley's
development plan in Michigan, and our limited experience in the casual dining
segment. Also, Meritage is subject to extensive government regulations
relating to, among other things, zoning, public health, sanitation, alcoholic
beverage control, environment, food preparation, minimum and overtime wages and
tips, employment of minors, citizenship requirements, working conditions, and
the operation of its restaurants. Because Meritage's operations are
concentrated in certain areas of Michigan, a marked decline in Michigan's
economy, or in the local economies where our restaurants are located, could
adversely affect our operations. DATASOURCE: Meritage Hospitality Group Inc.
CONTACT: Robert E. Schermer, Jr. of Meritage Hospitality Group Inc., +1-616-776-2600 Web site: http://www.meritagehospitality.com/
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