Feb. 3, 2003
SINGAPORE -- Wong Chin Yong, managing director at Inno-Pacific Holdings, Ltd., said his company wants to expand its Shakey's Pizza brand now that it has settled two lawsuits with two U.S. Shakey's franchisees.
The company announced on June 12 that a year-long legal battle between its Garden Grove, Calif., subsidiary, Shakey's Inc., and two of its California-based franchisees, John McNulty, Jr., and Sterling Foods, was settled amicably.
According to the Business Times, Wong called the Shakey's brand "still valuable to us," and that Inno-Pacific's strategy is to grow that brand's franchisee numbers in the U.S.
Twenty-five years ago, Shakey's had more than 400 U.S. stores. Since then, the number has dipped to just 66.
Inno-Pacific bought the chain in 1989. Today the Singaporean company's sole revenue source is royalty income paid by U.S. franchisees of Shakey's Inc. Each franchisee pays 3 percent to 5 percent of store revenues.
According to Business Times, 2001 revenue for the pizza chain was $57 million, about $800,000 in sales per store.
Inno-Pacific's financial strain moved it in early June to offer about 20 percent of its stock for S 1 cent (about a half cent U.S.) a share. Though it had hoped to raise raise S $3.7 million (U.S. $2.1 million), the sale netted just S $2 million (U.S. $1.1 million).
In past statements released to the Singapore Stock Exchange, Inno-Pacific admitted that nearly all of the funds raised from the stock placement will be used to pay operating expenses and outstanding liabilities.
Wong told Business Times the company will examine other ways to raise capital.
On June 14 the company announced that two non-executive members of its board of directors did not seek re-election during Inno-Pacific's annual meeting earlier this month.