The Breakfast Club to launch £750,000 crowdfund
The all-day focused restaurant group (despite its name) will use the funds to open the 12th Breakfast Club, in London, and is also planning to launch a new a community cafe model, under the Breakfast Club banner, which would support vulnerable groups and would see profits ploughed back into the community.
The community café model is based on current projects taking place within the estate, in which staff host regular social clubs for older people in the local area
Founder Jonathan Arana-Morton says that after a pause in expansion the conditions are right for The Breakfast Club to seek out further sites, with the barrier of significant premiums having been lifted in some locations he had long targeted.
He says the huge potential for the group is highlighted by the fact that the business is the only dedicated breakfast-out brand, but says that the brand trades strongly throughout the day, with 65% of revenue coming after midday, and has twice won London bar of the year for its speakeasy cocktail bars.
While The Breakfast Club operates two regional sites - in Brighton and Oxford – Arana-Morton says the immediate focus would be on growth in the capital.
The Crowdcube campaign, which is set to be publicly launched this week, is seeking £750,000 for a 4.49% stake in the business, valuing it at just under £16m.
“We thought long and hard about whether crowdfunding was the right route for us – and I’ll be honest, I find this much more nerve-wracking than talking to a bank or an investor," says Arana-Morton.
“Crowdfunding isn’t the new kid on the block that it was and investors are smarter. You do get brands who have only been about for five minutes but are putting crazy valuations on themselves. We didn’t want to do that and hopefully it gives people confidence that we have been around for 13 years and we are established.”
“The community cafe idea seemed to fit really well with crowdfunding too. That’s something we’ve been thinking about for a while. Really engaging with the community and supporting vulnerable groups is a part of our community but we wanted to make a real statement of that and focus a new opening around it.”
The group, which won Growth Company of the Year, at Retailers Retailer of the Year 2016, has seen 91% revenue growth between 2014 and 2018 - to £15.2m with £502,000 net profit. In that time it has opened seven sites.
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