Food franchisor Pie Face Holdings Pty is turning to outside investment to raise funds for business expansion. The company is looking to raise up to $10 million in a Pre IPO investment expected to be completed by 30 June 2011 and plans to list on the ASX in 2012.

The company has appointed Macquarie Group and CBA Equities to assist the process. The immediate investment offer is open to sophisticated and professional investors.

Wayne Homscheck, co founder and CEO, told Franchising, We’ve run the money on our own, this is the first time we’ve gone outside for funding. We produce all of our own product, so food production is a big part of the business. We need to upscale the facilities quite a bit, refinance a loan and open more company stores.

With plenty of potentical franchisees keen to buy into the Pie Face system, funding can still be a bit of an issue Homschek admitted. He added We’re not yet accredited by the big four, so to some extent this helps get accreditation accelerated.

Pie Face has reported accelerated growth with 27 stores opened in the last 16 months, bringing the total trading to 49, of which 37 are franchised. There are also 15 stores under development and the company’s plans are to open three to four a month.

The company’s revenue of $13.1m in the six months to 31 December 2010 was up from $11.7m for the year to 30 June 2010; and operating profit in the quarter to 31 December 2010 of $2.0m up 140 percent from the prior December quarter. Same store sales grew by about 30 percent over 2010.

How does Homschek account for the success of the business? Site selection, we’re picking better locations than we were 12 to 18 months ago. Secondly we have more franchisees in the system driving sales. All things being equal, they get better results than company owned stores.

And the brand itself is getting more traction. People are recognising the brand, he explained.

* What is Pie Face? Click here

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