ALLIED BRANDS TO FUND FRANCHISING WITH US CAPITAL

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.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Four ways businesses can use artificial intelligence to triumph in 2022
Partner Content
The last two years have delivered major disruption to the technology industry and broad...
PROS
Advertisement

Related Stories

QLD Premier confirms borders to reopen four days early

QLD Premier confirms borders to reopen four days early

With Queensland health authorities expecting the 80 per cent double...

Cyber weekend sales make November the biggest month in Australian online shopping history

Cyber weekend sales make November the biggest month in Australian online shopping history

November was the biggest month in Australian online shopping histor...

Woolworths takes on Wesfarmers in bid for Priceline with $872m offer

Woolworths takes on Wesfarmers in bid for Priceline with $872m offer

Woolworths Group (ASX: WOW) has today thrown its hat in the ring to...

Shopping Centres Australasia launches $750m metro convenience retail JV with GIC

Shopping Centres Australasia launches $750m metro convenience retail JV with GIC

After making its fortunes with suburban malls anchored by blue-chip...