Chairman and CEO Vince Wasik announced the formation of the company's new subsidiary Velocity Systems Franchising Corporation (VSFC). The new company will be responsible for developing franchise agreements with local and regional delivery companies in markets not currently served by Velocity Express.
"Through our franchise model, Velocity Express can offer our national customers increased geographic coverage and enhanced service offerings by partnering with the best, local and regional delivery companies in a specific market. In turn, by becoming a Velocity franchise operation, our franchisees will have access to opportunities created by our national account sales strategy, which they may not have had access to. This is truly a "home-run" for both of us," Wasik stated.
Ted Stone the company's CFO added, "Franchising will allow us to improve our gross margins by dramatically reducing the capital expenditures required to open new markets, while allowing us to expand our capabilities. As we migrate from our current agency relationships to franchise agreements we will also strengthen our financial performance."
Wasik then announced that Drew Kronick, the company's Executive Vice President of Business Development and Supply Chain Solutions, will also serve as the President of VSFC. "I am very excited about where we are headed with our franchising initiative. This is a huge competitive advantage for us in the marketplace and will enhance our already strong value proposition to our customers. Unlike 3rd Party Logistics relationships, we will have a much closer bond with our franchisees, who will be certified in the procedures required by Velocity Express's customers," Kronick concluded.
About Velocity Express
Velocity Express has one of the largest time definite nationwide delivery networks, providing a national footprint for customers desiring same day service throughout the
Certain statements in this release may be "forward-looking statements" within the meaning of Section 27A of the Securities and Exchange Act of 1933, such as the ability of the Company to improve gross margins and reduce capital expenditures and to develop franchise agreements with local and regional delivery companies. Statements regarding future developments are based on current expectations and involve certain risks and uncertainties that could cause actual results and developments to differ materially from the forward-looking statements. Such risks include the risks that the Company will be unable to reduce capital expenditures or expand its delivery network by signing new franchisees and other risks and uncertainties which are more fully described in the company's Uniform Franchise Offering Circular and the Company's filings with the SEC.