Naddaff, lured back to chicken, hatches expansion plans to grow Manhattan-based franchise chain.

NEW YORK--(BUSINESS WIRE)--May 15, 1997--George A. Naddaff, the galvanizing force who started New Boston Chicken (and sold it to former key executives of Blockbuster), started VR Business Brokers, Inc. (and sold it to Christie Corp. of London), and started Living and Learning Centers, Inc. (and sold it to Kindercare, Inc.), is about to give wing to his latest start-up franchise, Ranch 1, the Manhattan-based fresh grilled chicken-breast sandwich concept.

Naddaff, chairman and acting CEO of the 19-unit chain that only began franchising in 1994, intends to "dominate the New York market and to introduce Ranch 1 in every city across the country." To propel that growth, the start-up maven plans the private placement of $5.5 million to build new company stores and remodel existing units.

Partnered with Naddaff in Ranch 1 are James Chickara and Sebastian Rametta, president and senior vice president, respectively. Chickara and Rametta started Arnie's Bagelicious Bagels, Inc., in 1991 and three years later sold the $20 million wholesale bakery operation to the Quaker Oats Company.

Ranch 1, which generated sales of $16 million in 1996, was described by Naddaff as "classic textbook niche positioning that weds taste, fresh, healthy cuisine, upscale decor, quality and value with the convenience of fast food -- customers are served within one minute of placing their orders." What attracted his interest initially was the high volume that the in-town and mall stores were doing in New York City, the nation's most competitive market.

"The concept is certain to thrive in virtually any market, large or small, anywhere in the country," said Naddaff, who has assumed responsibility for formulating and implementing strategic planning, marketing the concept nationwide and further developing the impressive management team, beginning with the search for a top-level, experienced CEO.

Initially, he plans an "aggressive expansion campaign targeting the East Coast, from New England to Florida, and eventually across the country." Naddaff, through his wide-ranging associations, will be seeking key area developers and multi-unit developers.

"Non-traditional sites and co-branding also will play key roles in our diverse approach to expansion," he added.

Pointing to the lunchtime nature of Ranch 1 traffic, Naddaff observed that "with 80% of business generated between 11:30 a.m. and 2:30 p.m., we are catering to feet, not cars." Rather than adopt trendy gorilla marketing tactics, Naddaff has formulated "vertical marketing with a focus on the surrounding high-rise office buildings."

Naddaff, renowned for his ability to recognize winning concepts and propel start-up businesses to success, has come full circle back to chicken, having made his mark by his involvement in Kentucky Fried Chicken of Massachusetts more than 30 years ago.

Neither are Chickara or Rametta new to the food service business. Right out of high school Chickara opened NY Milk Farm Delis, growing it to six units by the time he sold it at age 22. He went on to establish the upscale Hot Bagels retail chain, later teaming with Rametta to open Bagelicious stores. Together they had assembled 20 units, including some of the city's highest grossing bagel retailers.

In 1991, the partners co-founded Arnie's Bagelicious, opening three bagel manufacturing facilities utilizing 300 employees. Together they developed the wholesale baking company into a $20 million a year operation -- doubling sales each year since 1991. Customers included McDonald's, Roy Rogers, Dunkin Donuts, Friendly's, Sara Lee, Marriott and others. They sold Arnie's Bagelicious to Quaker Oats in 1994, and subsequently sold most of their retail units.

Witnessing escalating competition in bagels, the Brooklyn-born partners researched alternative businesses over the next two years, ultimately identifying the six-year-old Ranch 1 chain as "the hottest concept in the burgeoning sandwich market."

"Ranch 1 had great recipes, great prices, a loyal customer base, a successful system and served fresh, healthful chicken," recalled Rametta. "It was exactly what we were looking for because we wanted to dominate whatever market we entered, and Ranch 1 provided the edge we needed -- including a nationally-visible location next door to the David Letterman Show. We also have teamed up with New York's number one radio personality, Howard Stern, to promote Ranch 1 on the airwaves."

Chickara, who noted that four new franchises are about to open in the New York area, emphasized, "It's a simple, yet attractive menu with low prices and such appealing selections as fresh, grilled chicken-breast sandwiches, fajitas, chicken and pasta and grilled chicken Caesar salad. We immediately saw the potential for replicating the concept nationwide in a variety of traditional and non-traditional locations such as kiosks in airports, supermarkets, superstores, malls, road stops."

They estimate that total start-up costs for a kiosk will be about $100,000, including a $15,000 franchise fee. Start-up costs for a traditional location range from $200,000 to $300,000, including a $30,000 franchise fee.

Crucial to the overall objectives of Ranch 1 is its top-level management team, including such industry veterans as Andrew Howard, vice president and chief operating officer. Howard had been senior vice president at Kenny Rogers for six years, prior to which he was COO at a Wendy's franchise in Miami. Earlier he was co-founder of the 7-unit Rudy's Sirloin Steak Burgers in South Florida.

Gary Occhiogrosso, vice president of franchise sales, had been a senior partner in CSS Franchising and is former CEO of United Foods, Inc. and Strike Enterprises, Inc., and Joe Hopkins, vice president, area development and site acquisition, served in that same capacity for Sbarro, Nathan's, Panda Express, Au Bon Pain and Great Steak and Potato. -0-

NOTE TO EDITORS: The company name "Ranch 1" contains an asterisk: Ranch(asterisk)1

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Steve Conrad, 847/291-8421 Ext. 255