Business Context and Reporting Period
This Form 8-K was filed by Muscle Maker, Inc. (trading symbol: GRIL) on December 7, 2021. The company is an emerging growth company incorporated in Nevada. The filing reports a material definitive agreement entered into by Poke Co Holdings, LLC, a wholly-owned subsidiary of Muscle Maker, Inc.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, cash flow, margins, debt, or liquidity metrics. The only specific financial figure disclosed relates to the transaction described below:
- Upfront Fee Received: $137,500 paid by Casa Moto LLC upon execution of the agreement.
Material Changes and Agreements
On December 7, 2021, the company's subsidiary, Poke Co Holdings, LLC, entered into a Development Agent Agreement with Casa Moto LLC. Key terms include:
- Scope: Casa Moto is granted the exclusive right to develop "Pokemoto" restaurant franchises in Worcester County and Middlesex County, Massachusetts, through 2041.
- Development Targets: Casa Moto is required to develop 15 restaurants in the Massachusetts area by 2028 and one restaurant in Hartford County, Connecticut.
- Payment Structure: The $137,500 fee represents prepayment for ten initial franchise fees (nine for Massachusetts locations and one for Connecticut).
- Exclusivity: As long as Casa Moto maintains exclusivity, the company will not engage other development agents for the specified area.
Guidance, Outlook, and Risks
The filing does not contain updated financial guidance, management commentary on future outlook, or specific risk factors beyond the standard contractual obligations. The agreement requires Casa Moto to diligently screen franchisees and ensure restaurants open during specified development periods. Certain confidential portions of the agreement were omitted from the public filing.
Investor Verification Checklist
- Verify the actual receipt of the $137,500 upfront fee in the company's cash flow statements.
- Review the full text of the Development Agreement (Exhibit 10.1) and Addendum (Exhibit 10.2) for omitted schedules and confidential terms.
- Monitor future filings for progress reports on the development of the 15 required Massachusetts locations and the Connecticut location.
- Confirm the company's classification as an emerging growth company and its implications for financial reporting standards.