That is generally done through some sort of promotion conducted by the issuer. The effort was backed with a media advertising campaign, as well. Customers and others who completed a postage-paid card, on which they could request an offering circular and franchise information, were promised an automatic entry in the company's contest to win shares of Manhattan Bagel stock. Each participating store was allocated 100 shares of stock, and separate drawings were held, guaranteeing a winner for each outlet. While the SEC's liberalization of the Regulation A rules in June 1992 allowed companies doing self-underwritings to go beyond the traditional tombstone ad, this is probably the most comprehensive program developed to date.
People walk in and out every day.
Plus, the stores get a terrific mix of traffic, ranging from housewives to the presidents of companies on their way to work. So the program had the potential to provide a good gauge of support across a broad spectrum. Manhattan Bagel chairman Jack Grumet says the company decided to proceed with the program after discussing its options with its attorneys, auditors and members of the financial community. He plans to use the proceeds from the IPO to accelerate and support the bagel chain's growth. Among other things, funds are expected to be utilized to complete the automation of the company's bagel dough factory, to open a second factory in 1994, to provide financing for franchisees, to hire additional staff, and to boost advertising and marketing efforts.