Jan 31, 2017
Freshii CEO sees healthy growth prospects as company goes public
By Paige Ellis
Freshii plans to roughly triple its store count by the end of fiscal 2019, but the company’s CEO says he’s taking a “disciplined” approach to growth.
“When we were on the road over the last three weeks raising money, some shareholders said ‘Why are you going so quickly?’ and others said ‘Why aren’t you going fast enough?’” Matthew Corrin, founder and CEO of Freshii, told BNN. “So it just depends on who you ask.”
Investors like the plan. Shares of the healthy fast-food chain moved to an intraday high of $13.07 on the TSX Tuesday as the company made its stock market debut. That’s 13 per cent higher than its recently revised initial public offering price.
According to its prospectus, Freshii is still in “the very early stages” of growth, and plans to open up to 160 new franchised locations in 2017. The company launched 12 years ago and currently has about 240 locations in 15 countries.
“It’s not aggressive growth that we’re managing, it’s aggressive demand,” says Corrin. “We get over 4000 franchise applications over the trailing 12 months. What we’re trying to do is be incredibly disciplined on selecting the best partners.”
One money manager applauds the company’s successful stock market launch, but warns an aggressive growth strategy is risky.
“They can only grow as fast as their supply chain,” Greg Taylor, Portfolio Manager at Logiq Asset management, tells BNN..
Freshii itself lists its “limited suppliers for… major products” and “reliance on one custom distribution company” in North America as risks in its prospectus.
But Corrin downplayed the concerns, saying he created “probably the safest supply chain in the industry.”
“There are three large distribution companies across North America,” he notes. “And, in fact, whether you’re Starbucks or McDonalds or Wendy’s or Burger King or Subway you use one of these three large distribution centres, and so do we.”
