River Cottage Canteen, the restaurant and deli concept led by high profile chef Hugh Fearnley-Whittingstall, has followed Chilango in issuing a £1m mini-bond through crowd-funding website Crowdcube as it looks to expand to large footfall sites in prime locations.
So far the company has raised £487k with 144 people investing in the bond, which pays 7% interest.
It said that the bond should help it to grow from three sites this year to seven by 2018, and it is hoping to launch one new Canteen each year.
The company said it planned to use part of the money from the bond to fund some of the capital cost of opening in Winchester where a site has already been secured, and the remainder will be used to reduce bank borrowings until it is ready to open Canteen number five.
It has previously looked at sites in Cardiff, Cheltenham and Exeter.
The company states: “River Cottage Canteen annual sales rose to £4m this year, over 3.5 times 2011 sales of £1.1m. Over this period the group has expanded from one store to three whilst also building up a head office team to oversee further growth. In this last year the average Canteen produced sales of over £1.3m, with the busiest restaurant achieving just over £1.6m. Each restaurant is on target to pay back opening and design costs within three and four years of trading. The first canteen to open was in Axminster and although only a small town the site has traded at over £1m per annum from its first year of opening. Sales are boosted by the in-store deli and a close working relationship with Park Farm just down the road.
“In the next phase of expansion we are also looking at sites where branded operators congregate and higher footfall can be expected. To make this more economically feasible we have developed a model for smaller footprints. This will substantially widen the range of sites that we can consider and improve the prospects for delivering the expansion plan.”
