Freshii goes pub­lic with am­bi­tious growth plan

The Hamilton Spectator - - BUSINESS - LINDA NGUYEN

TORONTO — Freshii is count­ing on grow­ing con­sumer ap­petite for healthy food to power an am­bi­tious growth plan that would see the restau­rant chain more than triple the num­ber of fran­chised lo­ca­tions within three years.

The Toronto-based eatery, which spe­cial­izes in cus­tom­iz­a­ble sal­ads, wraps, bowls and smooth­ies, is aim­ing to have as many as 840 lo­ca­tions world­wide by the end of 2019. It had 244 restau­rants through­out North Amer­ica, South Amer­ica and Europe as of Sept. 25.

Chief ex­ec­u­tive of­fi­cer Matthew Cor­rin said his com­pany is poised to cap­i­tal­ize as more peo­ple em­brace the trend to­ward im­prov­ing health and well­ness, which can in­clude ev­ery­thing from lunch­ing on quinoa bowls to wear­ing eth­i­cal yoga gear.

“Look, I can have a burger with the best of them, but there is a time and place for a splurge,” the 35year-old said Tues­day fol­low­ing the com­pany’s de­but on the Toronto Stock Ex­change.

“The re­al­ity is that you need to be — more of­ten than not, more days than not, more meals than not — you need to be pick­ing bet­ter-foryou in­gre­di­ents, health­ier foods to keep you en­er­gized and not put you in a food coma. That’s how I think about it. I think one of the rea­sons why peo­ple have his­tor­i­cally picked un­healthy fast food is that it’s the path of least re­sis­tance, and it’s the most af­ford­able op­tion out there.”

The com­pany’s ini­tial pub­lic of­fer­ing was priced at $11.50 a share, raising to­tal gross pro­ceeds of $125 mil­lion. The shares gained 72 cents on Tues­day and an­other 83 cents Wed­nes­day, clos­ing at $13.05.

Cor­rin, who founded the com­pany and opened its first lo­ca­tion in Toronto in 2005, said he be­lieves Freshii’s ap­peal of fast and fresh food is uni­ver­sal, point­ing to the more than 4,000 fran­chise ap­pli­ca­tions it re­ceives each year.

Store sizes range from 250 square feet to 2,500 square-foot, stand­alone lo­ca­tions. There’s one in Hamil­ton, at South Lin­coln Square on Up­per James.

Cor­rin said Freshii is most pop­u­lar among con­sumers be­tween the ages of 18 to 34, who want quick, healthy, cus­tom-food options at a rea­son­able price and want to back a brand that sup­ports phil­an­thropic en­deav­ours. The com­pany do­nates a meal to a child in need through the char­ity Free The Chil­dren when spe­cific meals are pur­chased.

Ac­cord­ing to re­tail con­sul­tancy NPD Group, Cana­di­ans spent $50 bil­lion eat­ing out at restau­rants in 2016, with $322 mil­lion of that at fast-casual restau­rants like Freshii, Five Guys and Pan­era Bread.

Al­though it is still con­sid­ered a small seg­ment of the over­all mar­ket, Robert Carter, NPD’s ex­ec­u­tive di­rec­tor of food ser­vice, said it’s one the fastest grow­ing ar­eas.

The num­ber of peo­ple vis­it­ing fast-casual restau­rants, defined as places where food is pre­pared fresh on the spot, cus­tom­iz­a­ble and more ex­pen­sive than fast-food out­lets, grew by 10 per cent last year com­pared to a year ear­lier, ac­cord­ing to NDP Group data.

To achieve its growth, Freshii will have to ex­pand its menu to en­tice more cus­tomers who wouldn’t typ­i­cally eat at its restau­rants and en­cour­age loyal cus­tomers to re­turn more of­ten, Carter said.

“If you want to grow in to­day’s mar­ket, you have to give cus­tomers mul­ti­ple rea­sons to come in.”

It’s a feat that may prove to be dif­fi­cult as Freshii com­petes with other chains that have ex­panded into health­ier food options, such as McDon­ald’s and Tim Hor­tons.

But Cor­rin be­lieves Freshii’s stay­ing power is that it’s the “nex­tgen” of healthy eat­ing.

“We think there’s go­ing to be Wendy’s and Burger King for ev­ery McDon­ald’s and we’re McDon­ald’s,” he said. “That’s the way we view it. We started first and we plan on stay­ing first for a very long time.”


Matthew Cor­rin, cen­tre, founder and CEO of Freshii, is sur­rounded by friends, fam­ily and em­ploy­ees at the open­ing of trad­ing Tues­day of the com­pany’s shares on the Toronto Stock Ex­change.

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