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Non-Tech : RAINFOREST CAFE

RAIN 5.260

+1.3%

3:39 PM EST

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To: Tony C. who wrote (3570)	12/3/1997 6:59:00 PM
From: Dennis Vail	Read Replies (1) of 4704

Tony, >Can someone tell me if this is good or bad ?< Right now its mostly confusing and very very surprising. I wish I would have gotten home sooner so I could call headquarters on this because as recently as May, Berman was calling RAIN overcapitalized. So what's changed since then? With no further facts I can see a few possible explanations. 1) RAIN in the the process of ramping up expansion from a 50% five year growth rate to close to a 100% rate. That would be interesting in the short-term but I don't know how wise that is in the longterm. 2) RAINs going to open alot more tourist- centric stand alone Icon Units like Chicago and the proposed one in NY Times in a very short-time. Perhaps the logic would be they cost more to open but the same store sales numbers show in the long run this is the best way to go. Perhaps they are considering this on a worldwide basis and plan to open units themselves next year or so in Paris, Tokyo, Berlin, Rio de Janiero, etc. as well as every major tourist trap in this country and all the international Disney parks. 3) Maybe they are giving up on franchising the international units and plan to open and run the units themselves as they know the right way to do it and can see that the profits there for the taking. 4) Maybe they are going to do a Rainforest character movie or video and they need the cash horde for that. And the one none of us wants to hear 5) Robinow been cooking the books and it really costs 2 or 3 times as much to open every unit or Brimmer resigned but first awarded himself $100 million in serverance pay and skipped to a small island off of Madagascar or whatever mightmare malfeasance one's cares to conjure up. Anyway, there BETTER be a explanation forthcoming from the company soon if they haven't already explained it to the analysts. Regards, Dennis

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