FRANCHISE operator of Usain Bolt Tracks and Records (UBT&R), Franchise Jamaica has temporarily shuttered the restaurant in Ocho Rios in an attempt to minimise cost as well as capture more customers.

The restaurant’s location at Pineapple Place across from the St Ann Chamber of Commerce, in addition to management by the husband-and-wife team of Joshua Jhamnani and Marsha Bent-Jhamnani, was expected to “create the perfect profile of a successful venture” when the restaurant opened in 2016.

The plan involved targeting arrivals from the cruise ship and hotel industry, with primary focus on passengers from Falmouth and Ocho Rios’ piers and visitors from north coast hotels.

But three years later, CEO of KLE Group, Gary Matalon, has found the location to be a bit “off-pitch” and causing customer acquisition cost to be very high.

“There wasn’t much in the neighbourhood attracting traffic — neither locals nor tourists. The fact that we were as successful as we were in that location was as a result of the efforts made to drive the traffic through our doors and this came at a cost,” Matalon said in an e-mailed response to Observer queries.

Instead of shutting down the facility, Matalon hopes to recover the expenses as well as improve overall profit for the Group from a new location which he says places the business right in the centre of activity and will better serve both the tourists and locals.

The new location was, however, not disclosed. It is likely that the company would want to position itself near to competing restaurant Margaritaville’s, which is strategically placed in a prime location near to the cruise port at Island Village

“We have identified a location which is better suited for us from a visibility and accessibility point of view,” he told the Caribbean Business Report.

Plans are to open the new Ocho Rios UBT&R restaurant by September. The KLE Group is now in the process of completing the design.

“It’s most important that this is done properly as it sets the stage for everything else that is to happen thereafter. We timed this to happen in the off season so the aim is to be up and running in time to catch the beginning of the 2019/20 season,” he reasoned.

The new location is indeed quite significant for the Group which moved from a profit of $8.9 million in 2017 to losses of $25.7 million for its year ended December 31, 2018. Of that amount, $12 million was from its associate company, Franchise Jamaica, despite the operation making sales of $19 million.

The losses resulted in KLE’s auditors, BDO Jamaica, red-flagging the company as a going concern.

“The company sustained operating loss of $13.4 million for the financial year ended 31 December 2018 and its current liabilities exceed its current assets. However, the company has the full support if its majority shareholders,” the independent auditors said in discussion and analysis of the company.

BDO added, however, that management remains optimistic on the company’s direction, and believes it is in a good position to achieve real growth in the future, through franchise expansion.

The company has projected to significantly improve its operating results and by extension reduce operating losses and is also finalising its negotiation of long-term financing with its bankers to settle its significant current liabilities.

Further, FranJam has successfully started additional franchises in London, United Kingdom and is in negotiations with others.

According to the company, Franchise Jamaica’s revenue of $19 million came from a full year operation at the Ocho Rios franchise and just over a half-year from Montego Bay which opened on May 16th 2018.

Total revenue for KLE Group stood at $219.9 million for 2018 financial year compared to $226.8 million in 2017. More than 90 per cent of that was from the flagship restaurant UBT&R in Marketplace, Kingston.

“We believe this will be quite significant. The fact is we were able to generate respectable revenue at a location we’ve learned is less than ideal. Visitors to the island are very interested in the brand and make it a point to experience it,” Matalon said.