LISTED restaurant operator Max’s Group, Inc. (MGI) said it has set a capital spending budget of roughly P600 million mainly to modernize and for the makeover of “select flagship” stores.

The company made the announcement on Friday as it reported earnings rose by 12% in 2017 to P626.69 million, from P561.74 million in 2016, helped by sales as it boosted its store count and improved efficiency.

“Capital spending programmed at approximately P600 million will redeploy assets into other strategic initiatives such as a system modernization program to reinforce support services, and the construction and renovation of select flagship stores to improve the customer experience,” MGI said in a statement.

For 2018, the company said it will be focusing on a franchising-led business model to drive expansion. With its planned roll out of 80 to 90 new outlets primarily through franchising its core brands, MGI said it “will be able to ensure an active presence in key geographies, and at the same time, generate higher fee-based contributions to revenue.”

Delivering a fresh boost to sales were its 78 new stores opened in 2017, 14 of them are located overseas.

MGI, whose brands include Max’s Restaurant, Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, Meranti, Sizzlin’ Steak, Maple, Kabisera, Le Coeur De France and Singkit, has a store network of 673 branches, with 55 across various cities in North America, the Middle East and Asia.

The restaurant operator’s top line rose 11% to P12.66 billion from P11.44 billion, with restaurant sales recording an 11% increase of P10.46 billion from P9.42 billion, driven by sustained same store sales performance and revenue contribution of new stores.

Its delivery business posted a steady growth, MGI said, increasing by 27% to P1.37 billion from P1.08 billion attributable to its efforts to broaden online ordering channels and upgrade delivery infrastructure.

MGI said “strengthened franchising operations” contributed to the 13% increase in commissary sales of P1.42 billion from P1.26 billion.

Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at P1.24 billion.

Max’s shares were up 0.12% or P0.02 to end at P16.52 each. — with report from P. P. C. Marcelo

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