EXHIBIT 99
MERITAGE HOSPITALITY GROUP INC.
1971 EAST BELTLINE, N.E., SUITE 200
GRAND RAPIDS, MI 49525
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TELEPHONE: (616) 776-2600
FACSIMILE: (616) 776-2776
WWW.MERITAGEHOSPITALITY.COM
FOR IMMEDIATE RELEASE
CONTACT:
Robert E. Schermer, Jr.
Chief Executive Officer
Meritage Hospitality Group Inc.
616/776-2600
MERITAGE SIGNS NATION'S FIRST O'CHARLEY'S FRANCHISEE DEVELOPMENT
AGREEMENT FOR THE STATE OF MICHIGAN AND COMPLETES INITIAL
TRANCHE OF PRIVATE EQUITY OFFERING
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GRAND RAPIDS, Michigan, December 29, 2003. Meritage Hospitality Group
Inc. (AMEX: MHG), the nation's only publicly traded Wendy's franchisee, today
announced that it signed the nation's first development agreement with
O'Charley's, Inc. Under the agreement, Meritage has the exclusive right to
develop O'Charley's restaurants in the State of Michigan. The Company will
initially develop 15 restaurants under the terms of the agreement. O'Charley's
is regarded as a leader in food quality in the casual restaurant segment, and
currently operates 206 restaurants in 16 states in the Southeast and Midwest. A
typical O'Charley's restaurant is a free-standing brick building containing
6,790 square feet and seating for 275 customers, including 52 bar seats.
Meritage's Chief Executive Officer, Robert E. Schermer, Jr., said,
"Having an exclusive O'Charley's development agreement covering the State of
Michigan and a proven management team, we are well positioned to take advantage
of this significant opportunity in the casual dining segment. I believe
O'Charley's selected Meritage to roll out its concept in Michigan in part
because of their respect for our track record in developing Wendy's stores. On
average, Meritage opened a new Wendy's restaurant every eight weeks for the last
four consecutive years, and now operates 48 units - 37 of which the Company owns
both the land and building. During that same period, Meritage extensively
remodeled its older stores, and improved operations to the point where Meritage
is currently ranked among the best in the entire Wendy's system. The Company's
$50 million core business will provide a solid infrastructure for the roll out
of O'Charley's restaurants."
Meritage initiated a private placement offering to raise capital to
fund its expansion into the casual dining segment. To date, the Company has
closed on $4.5 million, and estimates the total proceeds from its private
offering will be $7.5 million of which approximately $4.8 million will be used
to develop O'Charley's restaurants. In addition, the Company has a $6.3 million
financing commitment from GE Capital Franchise Finance and a new $2.6 million
credit facility with Standard Federal Bank. Mr. Schermer added, "Meritage is
adequately capitalized for the future rollout of O'Charley's restaurants in
Michigan, and it is now a matter of execution which is where I believe our team
is at its best. Our mission, simply stated, is to become the `Midwest's Premier
Franchise Operator'."
Meritage currently operates 48 "Wendy's Old Fashioned Hamburgers"
restaurants throughout Western and Southern Michigan serving 7.0 million
customers annually. The Company has been one of the fastest growing Wendy's
franchisees within the Wendy's franchise system for the past three years. The
Wendy's franchise system is the third largest quick-service restaurant hamburger
chain in the world with more than 6,375 restaurants and system-wide sales in
excess of $7.1 billion. Wendy's is the leading national, high quality hamburger
concept in the quick-service restaurant category.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995
Certain statements contained in this report 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. 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.
Forward-looking statement may also be identified by words such as estimates,
anticipates, projects, plans, expects, intends, believes, should and similar
expressions, and by the context in which they are issued. Such statements are
based upon current expectations and speak only as of the date made. The Company
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, on-going business
strategies and actions which the Company intends to pursue to achieve strategic
objectives constitute forward-looking information. Implementation of these
strategies and the achievement of such financial performance are subject to
numerous conditions, uncertainties and risk factors. Factors which could cause
actual performance to differ materially from these forward looking statements
include, without limitation, competition; changes in local and national economic
conditions; changes in consumer tastes and views about the food that the Company
serves; severe weather; changes in travel patterns; increases in food, labor and
energy costs; the availability and cost of suitable restaurant sites; the
ability to finance expansion; fluctuating interest rates; fluctuating insurance
rates; the availability of adequate employees; directives issued by the
franchisor; the general reputation of the franchisor's restaurants; and the
recurring need for renovation and capital improvements. Also, the Company is
subject to extensive government regulations relating to, among other things,
zoning, minimum wage, public health certification, liquor licensing and the
operation of its restaurants. Because the Company's operations are concentrated
in the state of Michigan, a marked decline in the Michigan economy could
adversely affect its operations.