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Non-Tech : RAINFOREST CAFE

RAIN 2.880

-1.7%

12:10 PM EST

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To: Milo Klanke who wrote (188)	7/19/1996 3:56:00 AM
From: Dennis Vail	of 4704

Milo,thats a very good point about the progress of expansion.That is as far as I can see the sole limit on RAIN's growth.How fast can RAIN construct new Cafes and get the staffs trained.If we stay on the current schedule we'll do fine.When I talked to the Operations Manager at the Gurnee pre-opening,,he said that 5-7 Cafes a year was all they felt they could do without diluting the product.I imagine that number will increase each year though.At any rate,if RAIN can meet the rest of this year's scheduled openings on a timely basis then we have very little to worry about. My interest in this quarters earnings is due to the feeling that Gurnee is sort of the runt of the litter as far as Rainforest Cafe locations go (although with Gurnee in hot pursuit of the tourist dollar that looks to be changed by next year).Given also the increased percent of revenues RAIN's spending on research this year,this quarter strikes me as a bit of a challenge but one I believe RAIN will meet.Management has seemed to consistantly be a couple steps ahead of the game and I become more impressed with them as time goes on.I also do not think anybody could have anticipated just how well the retail shop would be doing at Gurnee.My experience with bringing children and teenagers to the Rainforest has convinced me that Disney RAIN is going to be a goldmine from the getgo and will have a huge impact on 3Q revenues.So my feeling is if we meet ( and I expect we will) second quarter earnings then we will blow 'em away in the third and fourth quarters. Boy,750% growth in your daughters' investments in 2 years (down from a 1000%) is astonishing.Hope they make good use of it when the time comes. I'll look into the SM thread. Regards, Dennis

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