Muscle Maker Grill Serves Up Reg A+ Offering

The importance of a healthy diet has become paramount in recent years, but people on the run often have little more at hand than grab-and-chomp meals consisting of corpulent burgers or fat-fried chicken.

Muscle Maker Inc. has plans to change that situation for the better, especially for some of the most hurried consumers-members of the U.S. armed forces.

"These are the most passionate customers in the world," Muscle Maker president and CEO Robert Morgan told The Deal.

Muscle Maker is using a Reg A+ offering to raise $20 million in an initial public offering for its Muscle Maker Grill franchising operation. The deal will put the company on the NYSE.

"'Diet' is a dirty word," Morgan said. "We want to take the foods people like and make them healthier."

The company is working with TriPoint Global Equities LLC's online BANQ unit, which will act as the lead managing selling agent and sole bookrunner for the offering.

Reg A+ offerings derive from the JOBS Act of 2015 and are a reworking of Regulation A, which saw limited use.

Reg A+ allows private companies to raise up to $50 million from the general public over a 12-month period and become a publicly traded company.

Offerings under Reg A+ allow issuers to use general solicitation, otherwise known as advertising, to the general public. The JOBS Act's Rule 506(c) private placement also allows for advertising.

Fast food franchisers often operate restaurants on or near military bases, but Morgan hopes to offer more nutritious options.

It has five U.S. military locations under contract with Fort Bliss, Texas, currently open and Fort Benning, Ga., opening soon.

Morgan told The Deal that his grills provide armed services members with healthy meal options even when alternate sources of food are closed for the night. The grills' take-out options allow consumers to stock up with several meals that can be refrigerated.

The company avoids preservatives, and it makes sauces and other materials in the uses and ships them under refrigeration-rather than freezing them-so that customers can expect the same taste experience whether they are in Fort Benning or Kuwait, where the company is opening a grill in Salmiya (a suburb of Kuwait City) as part of a 10 restaurant agreement.

He also noted that heavy users typically visit the grills three times per week, a much higher ratio than is typical of fast food vendors.

Morgan said that the Reg A+ offering allows customers to buy shares in the company and that employees down to manager level are receiving shares or options. The restaurants advertise the offering on posters, and customers who purchase shares receive t-shirts that allow them to advertise the grills and their offerings.

Corporate revenue is up 86.4% for the first nine months of 2017 over first nine months of 2016, according to Morgan, and the company saw 12.44% sales growth for the third quarter of 2017 over third-quarter 2016 for corporate store restaurants that have been opened 15 months prior to Sept. 30 of this year.

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