OREANDA-NEWS. Franchise Brands, the international multi-brand franchisor, announces its intention to seek admission of its shares to trading on AIM, a market operated by the London Stock Exchange ("Admission") and an associated fundraising.

Franchise Brands is a group of international multi-brand franchisors with a combined network of over 350 franchisees in 12 countries, but predominantly in the UK.  Its current brands are ChipsAway, Ovenclean and MyHome, all of which deliver services to individuals of a similar socio-economic group through the Group's franchisees.  

The Group was founded in September 2008 by Stephen Hemsley (Executive Chairman) and Nigel Wray (Non-Executive Director), the Group's principal shareholders, who have substantial experience in franchising, notably through their well-documented involvement with Domino's Pizza. 

Key strengths: 

Well established, international multi-brand franchisor. Over 350 franchisees across three B2C service brands: 

o  ChipsAway is a mobile car paintwork repair specialist focusing on small to medium sized repairs. It has 225 franchisees operating throughout the UK and is the most recognised brand in the sector in the UK.

o  Ovenclean is a mobile domestic oven cleaning brand with close to 100 franchisees.

o  MyHome is a premium residential house cleaning brand which the Group is currently test marketing prior to a possible full re-launch. 

A highly experienced management team and Board: 

·     The management team and Board have extensive expertise in franchising, operating and growing profitable businesses and investigating acquisition targets.

·     In connection with Admission, the Group announces the appointment of David Poutney and Rob Bellhouse as Non-Executive Directors. 

Clear strategy to grow by selective acquisition of franchise brands, supplementing organic growth: 

·     The Group's strategy is to develop franchise businesses that provide services to individuals and SMEs.

·     Continued growth of existing brands by increasing the number of franchisees and supporting existing franchisees who wish to grow their businesses.

·     Increase the portfolio of franchise brands through the acquisition of franchise businesses which could benefit from the Group's established central services. Of particular interest are brands in the B2C service sector. 

Profitable, cash generative business: 

·     Profit before tax has increased by 52% from ?0.7 million in 2013 to ?1.1 million in 2015 (25% of turnover)

·     Highly cash generative 

Highly professional central services platform in place to support growth: 

·     Since 2010, and in particular following the appointment of Robin Auld as Marketing Director, the Group has developed highly professional marketing, franchise recruitment and support services including IT.  The Directors believe these are sufficiently well established that the Group is able to acquire some new franchise brands without significantly increasing its central overhead. 

Reasons for admission and use of proceeds: 

·     The Group is seeking admission to AIM in order to provide it with access to financial resources to acquire new businesses and to help meet its strategic objectives. 

·     The Directors intend to use the proceeds of the intended ?3-?3.5 million fundraising along with its existing cash resources for business expansion, in particular for acquisitions. 

·     Admission is expected to occur in Q3 2016. 

·     Allenby Capital Limited is acting as nominated adviser and joint broker and Dowgate Capital Stockbrokers Limited is acting as joint broker.                                
Stephen Hemsley, Executive Chairman, commented: 

"We are delighted to announce our intention to join AIM. Since 2008 we have built a profitable business in our existing brands as well as having developed a platform of central services such as marketing. A flotation will allow us to capitalise on this strong foundation and further expand the Group through the acquisition of complementary businesses. Franchise Brands has in place a highly experienced management team and Board and I am pleased to have reunited a number of the individuals that I have worked with previously over many years at Domino's."