Freshii Inc.

Thank you. Greetings. Welcome to Freshie's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Paul Hughes, General Counsel for Freshie. Thank you. You may begin.

Thank you, and welcome to Freshie's third quarter 2020 earnings conference call. Joining me today is Matthew Koren, our founder, chairman, and chief executive officer, and Daniel O'Reilly, chief financial officer. Please note that remarks in this conference call may provide certain information regarding our expectations, future plans, and intentions that may constitute forward-looking statements. I would refer you to our most recently filed management discussion and analysis, which include the summary of the significant assumptions underlying such forward-looking statements and certain risks and factors that could affect our future performance and our ability to deliver on these forward-looking statements. The third quarter 2020 earnings release, the related financial statements, and the management discussion and analysis are available on CDAR, as well as the investor relations section of Freshy's website at freshy.inc. All figures discussed on this conference call are in U.S. dollars, unless otherwise meted. Following our prepared remarks, we will open the line for questions. As we will not be conducting any follow-up calls this morning, we encourage you to use this question period to ask us any questions you might have about our results and our business in general. At this time, I would like to turn the call over to our CEO, Matthew Koren.

Thanks, Paul. Good morning, everyone, and thanks for joining us. This morning, we will report on the hard work executed by our franchise partners and HQ team members as we look to drive profitability, operational excellence, and sales initiatives in the face of the challenges the restaurant industry is facing. Through Q3 and to date, Freshie has deployed a mixture of defensive and offensive strategies that we believe will both see us through the current pandemic period and set us up for growth as things normalize. I want to reiterate the same five things we referenced on our last call that give me confidence in the strength of Freshie as a brand, a network of restaurants, and our ongoing omnichannel expansion in the health and wellness industry. These five sources of confidence continue to be, one, our attention to the importance of managing restaurant and corporate level profitability in an environment where restaurant traffic is challenged by the pandemic. Second, our sales recovery and maintenance of approximately 70% of 2019 sales through Q3 in the stores included in our same-store sales base, despite the second phase of the pandemic having hit hard in many of our key geographies. Three, the continued progress we are making in expanding beyond our lunchtime core and building our dinner business, which has grown considerably year over year as percentage of sales and which we expect to further strengthen by the recent launch of our chef-inspired dinner plates across Canada. Four, our Fresh E Foods consumer packaged goods division and the strong interest it continues to generate from both retail partners and customers. And five, the continued strength of the unity and connection between Fresh E franchise partners and the HQ team working arm in arm to address our collective challenges. These five points, plus the strength of our balance sheet, plus the commitment and grit I've seen exhibited across our entire system in the toughest times ever faced by restaurant operators, give me confidence in the longevity and strength of the Freshie brand. Before moving on to talk about our recent strategic work, I'd like to touch on Freshie's headline performance metrics. Over 90% of our North American traditional locations and 80% of our global locations are currently open and operating. Despite the impacts on the second phase of the pandemic in many key geographies, the Freshy Network saw an approximately 70% increase in system-wide sales in Q3 compared to Q2. Further, the system has retained the sales recovery it gained since the earliest days of the pandemic, with same-store sales holding generally consistent to what we reported on our last earnings call. As we mentioned last quarter, our drive stores, which make up over a third of our entire network, have generally experienced the strongest recovery trajectory, while our urban center and mall locations remain more challenged given traffic impacts in these areas. In terms of openings and closures, in Q3, we opened four new freshie restaurants. while closures slowed versus Q2 to 14 closures, giving us a net closure number of 10. I mentioned the continued strength of our cash position, which sat at approximately $31 million USD as of the end of Q3, and allows us the optionality and flexibility to invest in our system when and as needed to drive recovery and our forward-looking initiatives. Freshie has continued work on the three strategic pillars we set out for 2020 in order to accelerate short-term recovery and position the brand for long-term growth. First, we remain focused on maintaining and strengthening our core business. Following the completion of a Canada-wide rollout of our new elevated chicken in Q2, We recently began in-market testing of an all-new superfood smoothie lineup that includes brand new flavors like banana and nut crunch and the spirulina, as well as re-imaginations of freshy classics like strawberry banana and tropical mango. Early results in this test show that guests are enjoying the upgraded smoothie lineup, and we will continue to monitor the progress of this initiative. We plan to continue to innovate on our current menu and core lunch day part through customer-focused, data-driven menu initiatives in the coming quarters. Second, in terms of strengthening our digital presence, I'm pleased to let you know that we have launched phase one of the all-new Freshie mobile app. The new app has an entirely upgraded user experience, point-of-sale integration, improved suggested order add-on functionality, and personalization ordering functions. The next phase of the new app rollout will include the introduction of a revamped loyalty program, as well as in-app delivery functionality. We've seen strong user ratings and feedback on the Apple and Android app stores so far, which is a sign that our guests are appreciating the improved digital experience. As a reminder, Earlier this year, we completed the rollout of both Uber Eats and DoorDash partnerships across 90% of our serviceable locations in North America, which, as a complement to our new app rollout, further strengthens our connection with our guests in the increasingly important digital sales arena. Our third strategic pillar for 2020 is the continued development of dinner as a second day part. which is particularly important as we continue to see dinner make up a higher percentage of overall sales as compared to pre-COVID-19 levels. In late October, following a successful market test in Vancouver, British Columbia, we completed a limited-time only cross-Canada expansion of the new Dinner Plates platform, complete with family meal options and sides, and available for dine-in, take-out, or delivery. Additionally, as you may have seen, just this past Monday, we launched one of the biggest limited-time offer promotions to date as a brand and offered the entire country of Canada the chance to try Freshie Plates for free when ordering through the Skip the Dishes platform during dinner time. The feedback we received from both new and long-term guests on this promotion and on the plates themselves was excellent. We are excited about dinner as a second day part opportunity and intend to continue to invest in this area. Beyond the three pillars we are working on this year, we've also committed to working alongside our franchise partners to address the challenges of the COVID-19 pandemic. As I announced last quarter, we've created a $1 million investment pool to be applied to initiatives designed to accelerate our restaurant's sales recovery. We've now started deploying these funds in support of the Freshie Franchise Partner Network. In particular, we've invested significantly in marketing and promoting the launch of our new Freshie app, both physical and digital marketing initiatives, designed to drive check and in offsetting certain franchise partners' supply chain costs. As I said, our franchise partners have been working tirelessly to maintain momentum in this challenging environment, and we want to make sure they know that we're right there with them. In addition to continuing marketing and app-related investments, we planned to direct additional funds to further initiatives, including a new loyalty program rollout and the implementation of an enhanced customer experience program across our network. In terms of our consumer packaged goods division, in Q3, Fresh E Foods continued to build retailer relationships and generate new interest with its evolving lineup of healthy, shelf-ready options. In addition to continuing work with our current retail partners, including Walmart, Canada and Shell and others, following a successful rollout across enroute travel hubs in Ontario this summer, FreshEat and enroute will continue their partnership going forward. Motorists will continue to be able to choose FreshEat's better for you food options when they pull in to refuel at an enroute centre. The strong interest from major retailers in listing the Freshie Foods lineup is ongoing, and as I've mentioned, we look forward to reporting back on this division as our company grows. In summary, at Freshie, we continue to play both offense and defense during this evolving pandemic period. As I've described to you today, we are both actively investing and engaging in activities designed to drive sales and set the company and our partners up for long-term success. while still remaining highly diligent in focusing on the current cost-based management that must play a central role in all near-term pandemic management strategies. Before I turn the call over to Dan, I want to thank our entire team at HQ, as well as our franchise partners and their team members, for their continued commitment to the freshening mission throughout the ongoing period. Without this commitment, we would not be as resilient and strong as we have proven to be to date. Additionally, this quarter, it's important that I also acknowledge and thank many of our landlords that have come to the table and worked with our real estate team to put in place medium-term lease revisions for our franchise partners that better reflect the realities of the pandemic environment and that we believe will help see our restaurants through to better in-store traffic days. I truly appreciate their collaboration and look forward to our continuing relationships. I'll now turn the call over to Dan to provide some additional color on our financial results before opening up the call to any questions. Thank you.