Brisbane startup Franchise Retail Brands has shelved long-planned $20 million IPO
Anthony Marx, The Courier-Mail
October 24, 2017 5:49pm
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BOARD SPILL
A RECENT board spill inside Brisbane startup Franchise Retail Brands has led to the indefinite shelving of a long-planned $20 million IPO.
The shake-up has seen the departure of chairman Matt Morgan and the surprise return of managing director Sean Corbin, who only stepped down in early August.
It also creates great uncertainty for prominent retail chains such as the Shingle Inn and Doughnut Time, both of which have been optioned by FRB.
Corbin, who co-founded the outfit last year, told City Beat yesterday that the internal dispute revolved around the strategic direction of the restaurant group.
FRB includes New York Slice, Hombre Street Food Cafe & Bar, 1582 Coffee, Sabatini’s, Crave Ice Creamery and The Dessert House.
Sean Corbin illustration by Tony Bela.
It also has another seven “incubated’’ brands developed in-house.
Corbin came back after he was able to raise more money than Morgan and other internal board critics to pursue a different vision.
He said the IPO, first flagged late last year, had been postponed indefinitely and that alternative funding tools, such as mezzanine finance, may now be tapped.
But Corbin denied speculation that float underwriters Bell Potter Securities had pulled the pin and walked away from the deal.
Bell Potter equities boss Cyril Jinks confirmed yesterday that he was still on board and said he thought FRB now had the right business model, which would be helped by the fresh injection of capital.
Yet Jinks said Corbin still needed to hit KPIs and that any float would be at least six to 12 months away. UNHAPPY CAMPERS
IT IS understood that about $3 million has already been raised from between 20 and 30 investors in FRB, many of whom are not very happy campers.
City Beat spies tell us
there are mutterings about possible legal action against current or former directors over the running of the loss-making group.
Corbin, a former boss of now-defunct Allied Brands, laughed off this chatter as the gripes of a few malcontents.
Indeed, he pointed to FRB’s plans to launch three of its in-house brand stores in Albany Creek this Friday.
They’ll be unveiling the Urban Addiction cafe, a Melting Moments ice cream shop and a Tonic Specialty coffee outlet.
Corbin said the group had trimmed costs recently and was now at about the break-even point.
He predicted the first profits could be made by the end of this quarter and said two more option deals for existing retail groups may
pan out.
But City Beat has obtained FRB’s profit and loss statement from the past financial year and it’s not a pretty picture.
It shows the group suffering a $3 million loss and each of the existing franchises bleeding red ink.
“The cash burn will not last very long. They’ve got one foot on a razor blade,’’ one nervous investor told us.
Morgan, the former FRB chairman, declined to comment yesterday.
Shingle Inn co-owner Andrew Bellchambers did not return a call. He’s still got a pending deal to sell the chain for about $5 million either at the end of the year or when the float eventuates.
A similar arrangement exists for Doughnut Time, with hospitality kingpin Damian Griffiths poised to sell it for $15 million by March. He could not be contacted yesterday."
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