The restaurant chain, founded by Henry Dimbleby and John Vincent in 2004, is looking to expand from its current 13 sites to 23, both in the UK and abroad, by the end of 2015 and plans to use investment from its loyal customers, rather than the banks to do so.
Dimbleby said: “Our vision is to become an international fast food business, growing through franchise and owned stores. We would like to have a Leon on every high street in the UK but at the same time we will expand carefully and ensure we retain the quality which is at the heart of the brand.”
Money raised through the bond scheme will also be used to pay off a £300k convertible loan from shareholders and to set up the Leon Foundation, a not-for-profit organisation that aims to spread Leon's ethos and good work further afield and which will start with a cookery school run by Mitch Tonks this summer for children with renal illnesses.
Overwhelming response
Dimbleby and Vincent said they had approached some of Leon's Club Members with the idea of the bond scheme earlier this year and were overwhelmed by the positive response, so had moved ahead with the plans.
"Our customers regularly send us emails asking us to open near their office or near their home. This is a way that customers can get us there and benefit financially too," said Vincent.
Investors in the scheme will get a return of 10 per cent for £1,500, rising to 15 per cent for an investment of £5,000 or more. Repayment is made after three years in 'Leon pounds' which can then be redeemed in any of the company's restaurants.
The scheme will also be supported by a quarterly giveaway, where investors can win a range of prizes, from Leon-branded pyjamas to a holiday.
Dimbleby said: “As trust in the banks dives to ever deeper levels, the age of people power is upon us, where consumers trust their favourite brands above the banks. We love the idea of businesses and customers interacting for both to benefit. Leon can grow and our regulars receive returns that would normally go to a bank.”
It isn't the first time a small company has turned to its customers for funding help. Hotel Chocolat and hotel bookings and reviews website Mr & Mrs Smith both set up retail bond schemes to help fund their businesses.