A financial trend has hit the food industry, with consumers buying into their favourite brand in return for company expansion – and food.
Leon is riding an exponential curve. Since it lay the first foundations for a fast food phenomenon in London’s Carnaby Street in 2004, co-founders Henry Dimbleby and John Vincent have opened the eyes and tingled the palates of millions. Known for flying the flag for healthy fast food (a concept lost in 20 years of McDonald’s waistlines), it was only a matter of time before a brand based on simple innovation would take as organic an approach to its funding.
The chain has joined a growing list of businesses now issuing retail bonds, but instead of offering return in the form of a standard interest rate, it’s using its own currency, £eon Pounds. By buying a bond issue, you’re investing in the expansion of a business you care about in return for the food you love to eat. It’s a win-win situation for hungry people with money to invest. And in these financially-trying times, it allows the company to raise capital while loyal customers help drive expansion, and quite literally put their money where their mouth is.
Following feedback from Leon Club members confirming it could be a viable prospect (“Great idea – power to the people, not banks” said one), the restaurant embarked on opening the bond for applications until 31 July.
Leon set a subscriber target of £1.5m, giving potential investors a choice of the following options:
- An investment of £1,500 for three years, receiving 120 £eon Pounds each year, equivalent to 8% return or 10% gross return for the basic rate taxpayer;
- Invest £3,000 for three years and receive 300 £eon Pounds each year – 10% net return equivalent of 12.% return for basic rate taxpayer;
- £5,000 investment for three years, receiving 600 £eon Pounds each year – equivalent to a 12% net return or 15% gross return for the basic rate taxpayer.
Could this form of investment represent a way forward for other food ventures? Leon’s Financial Director Matt Jones told us: “We initially were inspired by our friends at Hotel Chocolat, and do hope we can help inspire other organisations to do the same.” Hotel Chocolat pedaled their idea into fruition in 2010, raising over £4m, paying dividends in monthly or bimonthly deliveries of chocolate.
With this idea, not only do investors receive their fast food currency, but Leon is also offering foodie nirvana in the form of quarterly prize draws. “You and us growing together” states one bond poster, offering a friendly arm around your shoulders, ready to take the chain to infinity and beyond. ‘Henry and John cook dinner for you at your house’; ‘Leon delivered to your desk every day for a month’ and ‘Eight cases of wine blended by you, with your label’, it harks.
“We will use the funds raised to enhance our current offering and to set up the Leon Foundation, which initially will work on bringing good food to kids with renal illness,” says Matt. And if you missed out on the first round of bond applications, fear not, as the team have said they’ll “certainly consider further bond issues at a later date.”
Would you consider making an investment in this way? Which food businesses would you like to see following suit?