Mrs. Paul's forcing them to use inferior fish compared to what they were used to using. And the company went into bankruptcy in 1983. In 1985 it emerged from bankruptcy. It was merged into a shell by Jim Catalan. From 1985 to 1993, Catalan started to grow the company again, albeit very slowly. In 1993, myself and a group of investors made an investment into the company. The investment was going to be used to bring out a new concept, a new, more modern, more updated seafood concept. The money was used to buy a whole bunch of stores and move the company from its base operations in Youngstown, Ohio to Jacksonville, Florida. They never brought out this new concept. Three years ago, myself and a group of investors bought out Jim Catalan, and gained complete control of the company. We brought in a couple of managers from Captain D's, led by a fellow by the name of Frank Brown. Frank's mandate was to roll out a grilled seafood concept and to turn the company around. He was there for two years, and was not effective in bringing out a grilled concept. We introduced grilled salmon, grilled tuna, grilled cod, grilled shrimp, grilled chicken with all the side vegetables ' la Boston Chicken our approach was to be the Boston Chicken of seafood and that failed. We spent a few million dollars doing that, it didn't work. In the interim, we had raised probably about $12 million to expand the company and expand this concept, and we went from 10 company-owned stores to about 75 company-owned stores. At this point we felt that we had lost control of the operations. And I became CEO in June of last year, June 1998, and my mandate was to turn the company around. The company was losing about $4 million at that point. My game plan was to cut the overhead dramatically, which I did, and to sell, close or franchise poor- performing stores. In the last 12 months, we've closed, franchised or sold about 35 units. We've turned the company around, taking it from minus-10% same-store sales to up a percentage or two. We have also taken it from losing $4 million to a run rate where we're making about $700 thousand to $1 million. The game plan from here is to be sort of similar to other small- to medium-sized fast food companies, and that's really to be in the licensing business. And what I've implemented in the last 12 months is a strategy to (a) co-brand with other fast-food chains, (b) get out of the restaurant owning and operating business, (c) licensing the Arthur Treacher's brand name, and (d) franchising again. As you know, I was on the board of Miami Subs before it was sold to Nathan's, and Miami Subs had close to 200 units, mostly in the Florida area. They had large stores doing about $800K each in sales. They were selling fried flounder and fried shrimp, and it was less than 2% of their sales, I convinced the board to replace the fried flounder and the fried shrimp and put in Arthur Treacher's branded fish and Arthur Treacher's branded shrimp. Sales of fish increased from 2% to 30% of sales. So it proved the power of the brand. Miami Subs is experiencing about 12% same-store sales increases on an absolute basis based on introducing Arthur Treacher's fish and chips, chicken and shrimp and chips to their menus and now we have 60 co-branded locations with Miami Subs, four with Nathan's, one with Pudgie's Chicken, and we're going to be testing a couple of units for Kenny Rogers Roasters. We're talking to several other chains. The game plan is, I think that the fast food seafood industry is a weak segment of the fast food industry. It's weak because the leaders are weak. I always say an industry's strength is reflected by the quality of the leadership. In hamburgers, you've got a lot of strong leaders, in chicken you've got strong leaders and in pizza you've got strong leaders; but in the fish business, it's really Arthur Treacher's; Long John Silver's, which is bankrupt; Captain D's, which is part of Shoney's, and hemorrhaging capital; and there are two other chains that are really nothing to speak of, H. Salt and Skipper's. Basically, I don't think seafood can stand on its own in the industry, but I think fish is a great adjunct to something else. I think that Arthur Treacher's branded fish and shrimp go great with, let's say hamburgers, they go great with chicken, they go great with pizza, subs, things like that, and that's the approach that we're taking. We're going to try to license the brand into other points of distribution where it fits in as an additive to their menu offerings. And we're doing it very successfully , 'I mean, it's very successful, it's being received very warmly. The brand is strong. It's been around for 30 years. We've probably had 2,000 restaurants over the course of 30 years and we've probably served over a billion people over the course of 30 years. The brand is very well-known and missed by all. In addition to branding in other restaurants, we're also entering into a branded program into the supermarkets and into mass retail chains. We are launching that as we speak. We have been developing it since March, and we're going into supermarket chains and the mass retailers.
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