ALLIED BRANDS TO FUND FRANCHISING WITH US CAPITAL

Written on the 9 February 2010

REBRANDING capital obtained from the US will assist the publicly listed franchisor Allied Brands to expand its profit margin on new franchises.

New York asset management firm SpringTree Global Investors, is crediting up to $4.9 million of its special operations fund to Allied Brands and its recently established franchising services division.

The Broadbeach company, whose brands include Baskin Robbins, Villa & Hut and Kenny’s Cardiology, will be able to access up to $200,000 per month in capital over the next two years from SpringTree. Initially, the funds will be used to rebrand acquisitions prior to selling them as franchises.

The funding has become available just as Allied Brands announced a $150,000 acquisition of four Coffee Bean and Tea Leaf retails stores, though CEO Shane Radbone says 14 Freedom Home & Cafe stores acquired from Steinhoff Asia Pacific will be the first to see the benefits.

Both recently acquired brands will be rebadged and franchised to the Villa & Hut chain.

“It will cost around $1.5 million to rebrand the Freedom stores to Villa & Hut, however they will sell for $4 million and continually generate $1.5 million each in yearly turnover,” says Radbone.

“Though we are only planning on selling four this year, when they are all sold we would have gained considerable market share without a lot of cost.”

Radbone says the move towards consolidating all the services associated with franchising into one vertically integrated business is what he is ‘really excited’ about.

Allied Brands marks the fourth Australian investment of SpringTree, which provides equity and debt capital to a number of sectors around the world.

As part of the deal, Allied Brands incurred an establishment fee of just over 1 million ABQ shares but can opt to repay the monthly tranches in cash rather than issuing equity.

SpringTree managing director Jeff Easton, says the successes of the other Australian investments were ‘encouraging’ in finalising the credit agreement.

“We have been very impressed with the current management of Allied Brands and the strategic opportunities available in the Australian and international market for the Allied Brands business,” he says.


Latest News

DARK DAYS AHEAD FOR AUSTRALIAN RETAIL AS REPORT FORECASTS MAJOR INDUSTRY ROUT

ALMOST 1,600 retail businesses are at risk of imminent collapse, including 21 major retailers with turnovers of more ...

GOODMAN TAKES PROFIT AND REVENUE DECLINE BUT LOOKS TO CASH IN ON AMAZON'S ARRIVAL

Commercial and industrial property group Goodman (ASX: GMG) has reported underlying full year net profit has dropped ...

REPORTING SEASON WRAP: MONDAY HIGHLIGHTS

* FORTESCUE Metals (ASX: FMG) reported net profit after tax (NPAT) of $2.64 billion for the year to June 30, up fr...

ARIADNE CUTS DEMANDS FOR FOUR ARDENT BOARD SEATS TO TWO AHEAD OF EGM

REBEL shareholders have reduced their demands on embattled theme parks operator Ardent Leisure (ASX: AAD) to give the...

Related News

DARK DAYS AHEAD FOR AUSTRALIAN RETAIL AS REPORT FORECASTS MAJOR INDUSTRY ROUT

ALMOST 1,600 retail businesses are at risk of imminent collapse, including 21 major retailers with turnovers of more ...

REPORTING SEASON WRAP: MONDAY HIGHLIGHTS

* FORTESCUE Metals (ASX: FMG) reported net profit after tax (NPAT) of $2.64 billion for the year to June 30, up fr...

WESFARMERS BOOKS BUMPER PROFIT BUT SUPERMARKET WAR HITS COLES' BOTTOM LINE

SUPERMARKET giant Coles has posted its biggest slide in earnings since it was acquired by Wesfarmers (ASX: WES) 10 ye...

ANALYSTS PREDICT WHAT AUSSIE LIVING IS LIKELY TO BECOME IN THE NEXT CENTURY

AS THE Australian population continues to grow, analysts are predicting what the country is likely to look like wi...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter