SPoT Coffee Signs Franchise Agreement, Shares Hover Near 52 Week High

SPoT Coffee Signs Franchise Agreement, Shares Hover Near 52 Week High

By: Dylan Sikes - AllPennyStocks.com News

Monday, December 21, 2015

According to the United States Department of Agriculture (USDA), world coffee production for 2015/2016 is expected to increase to 150.1 million bags, driven by record output in Indonesia and Honduras. The increase is also being driven by a recovery in Vietnam. The USDA notes that the record output in Indonesia and Honduras and a recovery in Vietnam more than offsets a shortfall in Brazil. The USDA says in its report that Robusta harvest in Brazil is forecast to decline 3.7 million bags to 13.3 million. Arabica output in the country is forecast to fall 1.2 million bags to 36.1 million. In Vietnam, production is expected to increase 1.9 million bags to 29.3 million on higher yields in most growing regions. Colombia’s production is also forecast to rise marginally. In Indonesia, production is forecast to gain 1.8 million bags to a record 10.6 million.


Given the increase in coffee production due to record output in some countries, prices could remain low. This augurs well for companies like SPoT Coffee Ltd. (TSX-Venture:SPP). Based in Toronto, Canada, SPP designs, builds, operates and franchises community oriented cafes and express cafes in New York state. The company’s community cafes provide its customers with the highest quality service, signature made-to-order meals and award winning micro-roasted coffee.

This morning, SPP announced that it has signed a new franchise agreement for a full franchise cafe to be located in Kenmore, New York. Kenmore was recently awarded the distinction of being among the 10 greatest neighborhoods in the U.S. by the American Planning Association. The new cafe will feature SPoT’s unique interior design and seating options. SPP said that it is currently reviewing several alternative locations. The company will select a location that meets its criteria, which is based on successful performance of its existing neighborhood cafes.

SPP noted that as demand for its full cafe and Express franchises accelerates; it continues to negotiate with several other serious prospective franchisees from across Western and Upstate New York. Anton Ayoub, President at SPoT Coffee, said that the company continues to receive and review new applications from qualified and serious owner-operator franchisees. Ayoub said that the company is getting requests for both full cafe and Express franchises, and hopes it will soon be able to announce a fourth franchise agreement, including the conversion of SPoT Orchard Park from “cafe under license” to a franchise cafe.

While SPP is a rather illiquid stock on the TSX-Venture, shares are close to their 52 week high, which is a strong nod of approval from shareholders as to the path that the Company has taken in 2015.

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