Generation Next Franchise Brands Inc (OTCMKTS:VEND) Is Today's Small Cap Focus

Generation Next Franchise Brands Inc (OTCMKTS:VEND) has been one the top runners among small caps over the past month. Shares have risen off their $.20 base to hit highs just north of $1. With shares now pulling back on profit taking, we're taking a closer look at what's behind the curtain on VEND.First up, a little background on the company. Generation NEXT Franchise Brands is parent company to Fresh Healthy Vending LLC, the market's leading healthy-choice vending machine franchise, Reis and Irvy's, Inc., the world's first robotic frozen yogurt vending robot and 19 Degrees, a corporate-focused frozen yogurt kiosk brand. The Company hosts over 350 active franchisees throughout the United States, Canada, Puerto Rico and the Bahamas, and continually looks to partner with like-minded entrepreneurs who share its vision.VEND kicked off 2017 by acquiring the intellectual property assets of South Carolina-based Robufusion, Inc., a developer of robotic-kiosk vending technology. The terms of this deal were that Generation NEXT provided Robofusion a cash payment of $420,000, issuance of a three-year, $2-million note and warrant consideration of 1,520,000 five-year warrants with a strike price of $.50 per share. Furthermore, certain Robofusion Officers, Directors and Shareholders signed a five-year, non-compete agreement.This was a smart move by VEND because its franchise concept, Reis & Irvy's, is built on technology licensed exclusively from Robofusion. With the acquisition, Generation NEXT now owns the following intellectual property: Reis & Irvy's trademark (U.S. Patent & Trademark Office trademark registration number 4530264); U.S. utility patent number 8,989,893; U.S. design patent number D647,926; and U.S. patent application numbers 20140120235 and 20160242434.Reis & Irvy's serves two different flavors of frozen soft-serve desserts as well as a swirl option, all available with six toppings in under 60 seconds and showcases the world's first soft-serve, robotic vending system. With the exclusive ownership of these assets, Generation NEXT is now exploring ways to leverage this technology for the development of future concepts that will expand its business. The goal is for Generation NEXT to take advantage of both domestic and international sales opportunities in the form of franchising and licensing. The company has now implemented and contracted third-party manufacturing, distribution, installation, training and a service network to support its customers in over 140 countries around the world.Last month, the company put out its Q2 results. Reis & Irvy's bookings aggregated 143 units and $5.5 million compared to zero in the prior year. Accounts receivables aggregated $9.6 million compared to $1.8 million. Deferred revenue increased to $18.5 million compared to $8.1 million. Losses increased to $3 million as the company's expansion plan lead to a notable increase in SG&A expenses.VEND's expansion plan is centered around growth. Reis & Irvy's has introduced a dedicated Location Procurement department to assist owners and operators across the country in researching, analyzing and securing locations on their behalf where the vending robots will have the greatest opportunity for traffic and success. The company has focused on high-traffic destinations, where captive and active audiences are evident. Hospitals, Grocery Stores, Malls, Family Entertainment Centers, Colleges, Military Bases and Museums/Science Centers all work as potential areas of opportunity for franchisees and the robots themselves.Earlier this month, VEND launched an internal subsidiary whose purpose is the creation, development and manufacturing of new robotic vending concepts that will utilize the many features from recently acquired design and utility patents. Generation NEXT has decided to increase its focus towards other products that could utilize the patents it owns that not only cater to frozen confectionary but also, and broadly, to "food and beverage." Generation NEXT Vending Robots Inc., will be solely focused on the creation, development and manufacturing of a new range of robotic vending machines. Founder Nick Yates said:

"With the ownership of these patents, Generation NEXT Franchise Brands and more specifically our newly-formed Generation NEXT Vending Robots Inc., is poised to change the landscape of robotic vending technology. Our goal is to identify food and beverage consumables, like we have already with frozen yogurt and ice cream, that can be delivered using our patented robot vending technologies. Our objective is to identify consumables that are subject to brick and mortar infrastructure that we feel need a little disruption."

Currently trading with a $25 million market cap, VEND is an exciting story among small caps. Mark Cuban recently said that the future is in AI and robots are the place to be. VEND's technology can be placed in any location and reduces labor costs. The machines just need to be stocked and they're ready to go. VEND has a great concept and a proven model. It's just now a process of management executing and delivering. So far, it looks like they are.We will be updating our subscribers as soon as we know more. For the latest updates on VEND, sign up below!Disclosure: We have no position in VEND and have not been compensated for this article.