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Fast-food chain Burger Fuel is targeting customers and small investors in an ambitious share float that values the $3 million annual revenue franchisor at $60 million.
And it has a new take on "Would you like fries with that?", offering members of its customer loyalty scheme early access to the shares. Burger Fuel plans to have "IPO advisers" in stores aimed at drawing in small investors.
Founder and chief executive Chris Mason said customers had a strong relationship with the brand. "We are showing loyalty and a bit of love saying, 'You guys eat the product, now you can own the product'."
Mason described Burger Fuel as a growth stock that would not initially deliver dividends but compared it with high-profile Vodka brand 42 Below.
Brokers said the $15 million float was too small to merit much attention.
ASB Securities broker Stephen Wright said it might pick up small investors who were willing to part with a minimum $1000 to be attached to the brand's cachet. However, the fundamentals of the business - valued at $60 million with a revenue of just $3.1 million last year - were "not inviting", he said.
ABN Amro Craig analyst Bryon Burke said it had the benefit of being a cash-based company. But he questioned why investors would want to get involved now rather than wait until it expanded further.
Mason said Burger Fuel aimed to use much of the $15 million raised from the NZAX for expansion into Australia where it has one store. The results for the Sydney store were three time that for Ponsonby when it started, he said.
Financial results in the IPO say "Burger Fuel International" lost $286,728 for the nine months to December 31 based on revenue of $84,463.
Partner Josef Roberts also said the $15 million would enable the company to expand more quickly "to Australia, the UK and maybe the US".
The company is chaired by former Merrill Lynch New Zealand managing director Peter Brook.
