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Habitual Fix announces US franchise deal

Habitual Fix announces US franchise deal

30 US stores and $6 million in franchise royalties expected during deal’s initial ten year term

Fast-growing fresh food company Mad Group, which is currently undertaking an equity crowdfunding campaign, has signed a Memorandum of Understanding (MoU) with an experienced partner to launch its successful Habitual Fix brand in the US$261 billion United States quick-service restaurant market[1].

The new US partner is due to pay a non-refundable deposit to Mad Group this week, and a Master Franchise Agreement is expected to be signed by the beginning of August. The deal will be for an initial term of ten years, with a ten year right of renewal. The first Habitual Fix store in the United States is expected to open in Los Angeles in the first half of 2016, with a minimum of 30 stores opening in the initial term.

The deal is forecast to add more than $400,000 in Earnings Before Interest and Tax (EBIT) in FY16, over $6 million in franchise royalties over the initial term, and then more than $1 million per year for the following ten years, if the right of renewal is exercised.

Chairman and Group Managing Director James Tucker says the MoU marks an exciting time in the evolution of fast-growing Mad Group.

“This is the first tangible evidence we can point to of the strong enquiry level Habitual Fix has received from interested Country Master Franchisees. Signing this deal and opening in the United States will add to our credibility and, we believe, will assist in securing other international master franchise deals.

“And clearly the timing couldn’t be better given we’re in the middle of a capital raising with Snowball Effect to help fund our growth.”

Mr Tucker says the new partner, whom he can’t yet name, comes with an excellent pedigree, and is keen to introduce a healthier food option to the United States.

“These deals can take time to negotiate but we believe we have found an excellent partner with relevant industry experience. The Founder and CEO is, in our view, particularly entrepreneurial and has a number of years of experience working for the McDonalds Corporation in multiple countries, including in the United States.

“There is growing consumer awareness in the United States about what people are eating and the fast food giants are battling headwinds. Habitual Fix is well positioned to take advantage of this changing trend, and turn Americans into food junkies, not junk foodies.”

Mad Group, which owns the Habitual Fix and Mad Mex (NZ) brands, is currently undertaking an equity crowdfunding capital raising of up to $1.5 million through Snowball Effect to fund its rapid growth.

Details of the United States MoU for Habitual Fix are not factored into the Information Memorandum for the capital raising. Full details of the Mad Group equity crowdfunding offer can be found at https://www.snowballeffect.co.nz/madgroup

Mad Group will be holding an investor presentation on Wednesday 20 May at 6pm at the Mad Group offices in Ponsonby for anyone who wants to come along and meet the Mad Group team.

ENDS


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