Established in 2006 and operating in the growing healthy fast food market, Wrap It Up! now has 11 stores across central London serving wraps inspired by food from around the world. Having turned over £3.1 million last year across their stores, Wrap It Up! have a queue of people asking for franchises and are striving to become the Subway of Wraps.
Wrap It Up! sells gourmet wraps inspired by food from around the world. We grew sales by 53% last year across our 11 stores (both owned and franchised) to £3.1m. We want to put a Wrap It Up! on every high street as a tasty healthy alternative to the greasy fast food of the past.
We are on the threshold of growth for 3 reasons.
1. We are profitable and ready for rollout.
2. We have a strong pipeline of franchisees ready to take sites.
3. Our new central kitchen will be able to support up to 100 stores.
Our Story
Our first store was opened in 2006 opposite London’s Liverpool Street station. Since then we have expanded and we believe that’s because we stayed true to our philosophy of sourcing only fresh natural ingredients to bring our customers authentic world food at an affordable price. Authenticity is key for us. For example we employ chefs from around the world and we like buying specialist items from suppliers with a culinary history going back to the original country, e.g. our hand-made rotis which are made by a Trinidadian family.
The company was restructured at the end of 2012 whereby a number of separate entities were combined into a single company (World Gourmet Restaurants Limited). We have emerged from this transition with renewed inspiration and in the last 2 years have strengthened and grown the business.
Achievements to date
Operating several stores in prime London locations including Liverpool St, London Bridge and Goodge St.
Revenue growth of 53% last year including franchised stores (48% in our business itself).
Profit (EBITDA) of 7% (9% excluding one-offs).
We have just passed what we know is the #1 barrier to entering the fast food market, i.e. achieving scale. With a head-office now paying for itself and site-level profits of 20%, each new site adds significantly to our profits because the extra cost to our head office for a new site is low.
Our Future
We want to be the Subway of wraps!
Our growth strategy is to ramp up what we are already doing. We will grow through a mix of company-owned and franchised stores. We have a queue of people asking for Wrap It Up! Franchisees, many of who have paid deposits, and our existing franchisees all want new sites.
Therefore in the short term our growth will be geared a bit more towards opening franchised stores to satisfy this demand and also to more fully utilise our new kitchen.
Proceeds from this fund-raising will be used to help build our new central kitchen and for expansion.
Natural fast food is taking the UK market by storm with brands such as Leon, Tossed and Chop’d attracting long queues. We see that the opportunity is large as the UK fast food market is currently worth over £6bn and dominated by the big brands (our research suggests this is 63% made up by the top 4: McDonalds, KFC, Subway and Dominos.
Market commentators believe there is a shift away from the unhealthy fast food of the past toward more natural food of higher quality. This is where we believe the opportunity lies and we are in a good position to benefit from the trend as we are on the threshold of growth.
Our strategy is to sell natural, authentic food at an affordable price. We see our main competitors as Mexican burrito chains such as Chilango, Chipotle and Tortilla, as well as independent wrap outlets and street food stalls.
We believe our competitive advantage is that we are a general wrap business, and not focussed on one cuisine such as Mexican food. Whether the customer craves a Caribbean Roti, a Lebanese Falafel or an Indian Tandoori Tikka – we do it!
We also know that our pricing is attractive to customers in comparison to our peers.
Threats to our business include competition from other wrap-based concepts. There are some new entrants to the market and we have experience trading near these stores. Our strategy is to exploit our emerging scale by expanding.
Tayub Mushtaq, MD
Tayub joined as the company’s first franchisee in 2010 after falling in love with the food. He took an active role in the wider company, helping to drive expansion. He became MD following a company restructuring in 2012. Tayub holds a degree in Business Finance.
Horun Meah, Operations Director
Horun joined the company in 2010 after previously being an investor in Wrap It Up!. He has founded a training service provider to private and listed companies which he converted to a not-for-profit social enterprise which continues today.
George Groves, Marketing Director
George joined in 2013 having sold his previous business of 3 stores to Wrap It Up!. He has a PhD in engineering and previously worked at an investment bank in the City with experience in equity markets.
Kashif Akram, Finance Director
Kashif is a Chartered Certified Accountant with many years’ experience in hospitality, audit & avisory, risk, financial and performance management as well as consultancy. He has clients across the hospitality sector.
Naureen Khan, Human Resources Manager
Naureen has worked as HR manager at Wrap It Up for 2 years and prior to that spent 4 years teaching at GCSE level. She has an MA in Sociology.
Afnan Bashir, Advisor
Afnan co-founded Wrap It Up in 2006. He is a director at a KFC franchise company operating several sites. He has an MBA from the University of Chicago.
SALES: Key sales drivers
New store openings
Existing store growth of 15% over 3 years
USE OF FUNDS: Outline how you plan to use the funds you raise on Crowdcube?
To build new central kitchen (labour, equipment)
To open new stores
EXPENSES AND PROFITABILITY: Please comment on your expense levels, gross and EBITDA margins
Overall profitability of 7% (EBITDA) is supported by site-level profitability of 20%
Overall profitability of 9% (EBITDA) when excluding one-offs.
EXISTING DEBT OR EQUITY INVESTMENTS: Please outline the background to any existing debt or equity finance on the company balance sheet
Long term debt includes £283,500 for mortgage of freehold commercial kitchen
Target £400,000 equity investment in 2015.
CASH: Cash burn rate, Operational cashflow, when will you need to raise the next round?
We do not anticipate further rounds
Cashflow is sufficient to meet needs.
We envisage an exit via a trade sale or stock market listing in approximately 5 years.
A trade sale to an established industry partner has added benefits such as allowing us to go to the next level of growth- for example, we know it’s easier to get sites as landlords prefer a big backer. We would also consider private equity houses active in the leisure sector and we have established some first tentative links. When the time comes we will market ourselves appropriately to deliver a strong return to investors.
In 2013 Tesco purchased the restaurant chain Giraffe for £49m. Giraffe at the time was branded as a family-friendly restaurant chain with 48 outlets. In the same year Byron Burger, the upmarket burger chain which at the time had 34 sites, sold for £100m.
Recent stock market listings in the quality food area include Shake Shack’s IPO of $1.6bn. We have recently investigated a listing on the AIM market alongside a cash injection and concluded that we need to grow the business first.
As a business with a mix of company and franchised stores we would target an exit multiple in excess of 2x brand revenue.