05/12/2007 - 22:00

Strong WA market provides sweet franchise opportunity

05/12/2007 - 22:00

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Queensland-based franchise operator, Allied Brands Ltd, is planning a major expansion of three of its brands in Western Australia, following a recently completed $10 million capital raising.

Queensland-based franchise operator, Allied Brands Ltd, is planning a major expansion of three of its brands in Western Australia, following a recently completed $10 million capital raising.

The company plans to open new stores for its Baskin-Robbins, Cookie Man, and Kenny’s Cardiology brands, at shopping centres in Perth and regional WA.

Allied Brands managing director Peter Graham said the roll-out would capitalise on the state’s strong economy. 

“The WA market is very positive for us. Baskin-Robbins is a well-regarded name, and although the other two brands aren’t quite as well known, there’s a very strong opportunity for growth,” Mr Graham told WA Business News.

Eighteen new stores will be opened for gift and card retailer Kenny’s Cardiology, although there is no confirmed target for Baskin-Robbins and Cookie Man, which will increase from 11 and three stores, respectively.

The Kenny’s stores will be completed within 18 months, with eight to be completed by June next year.

A number of the stores at shopping centres will be co-branded Baskin-Robbins and Cooke Man. 

Mr Graham said some of the $10 million in new capital would be used to buy other franchise businesses, with several WA franchises earmarked.

“We purchased the Cookie Man business in March and we’re looking for further appropriate acquisitions,” he said.

“What we’re actually looking for is to diversify our base and diversify our income stream, because our food businesses are quite seasonal.”

For the WA expansion, Allied Brands has departed from its traditional strategy of signing up franchisees first, preferring to secure sites and then recruit staff.

Mr Graham said this was a more aggressive strategy and was also aimed at securing suitable franchisees.

He said part of the company’s recent capital raising would be used to assist potential franchisees.

“Often it’s not possible for franchisees to get finance, because they’re young and may not have much equity,” Mr Graham said.

Allied Brands has conducted a radio advertising campaign in WA for the past few weeks, which Mr Graham said had generated a good response.

He said the company was currently in the process of signing up several franchisees.

The company has 81 Baskin-Robbins stores, 51 Cookie Man stores and 33 Kenny’s Cardiology stores nationally.

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