Thai Café seeks co-owners to fund ‘ambitious expansion plan’

In order to add 6 new establishments by 2026, the Belgian group of Thai restaurants is opening up to public capital participation. Thai Café therefore recently launched a crowdfunding campaign that will run until July 21. The goal of this first phase is to raise 2.5 million euros.

© Thai Café

“Today we would like to invite you to continue this adventure with us and become co-owner of all current and future Thai Cafés,” said Michel De Bloos, the Brussels entrepreneur and founder of the Thai restaurant group, in the foreword to the prospectus about this crowdfunding.

The concept of 'authentic Thai cuisine, sustainable and accessible', which is also called 'rare in Belgium', started twenty-two years ago in Ixelles and spread from Hasselt to Knokke across the country. There are currently eighteen establishments, nine of which opened during and after Covid. Almost 500 people work there and around 750,000 meals are served annually.

Two thirds of the production is consumed in the restaurants, the rest is taken away or delivered, mainly with own cars and scooters. All this is good for an annual turnover of around 25 million euros.

'Clear and realistic'

But for Thai Café, the time seems to have come to shift up a gear. Management has drawn up a five-year plan that includes an expansion of 15 new restaurants. It will be a gradual process, with a first phase in which the group aims to add six new addresses by next year.

In this context, a crowdfunding campaign was launched on 21 May, which will run for two months. Until now, management has financed the development of the chain with its own resources and bank loans. The operation is not taking place via an online platform such as Kickstarter. It is a call for participation in the financial capital.

In concrete terms, the public can invest in Thai Café Invest from as little as 500 euros. This is a kind of branch, under the legal form known as a special purpose vehicle or target company, and which is intended to limit the financial risks. This company will then invest in the Sabai Sabai holding, which owns the restaurant group.

'Shareholder Ambassadors'

“We are raising up to 2.5 million euros, which will allow the public to acquire a total of 9.33% of Sabai Sabai,” states the website about the operation under the ‘frequently asked questions’. The total investment in the multi-year expansion plan is estimated at 7 million euros. Depending on the success of the first phase, a second round of 1 to 1.5 million euros may follow in the next one and a half to two years.

In return, investors will receive shares that do not carry voting rights, but that will allow them to benefit from “economic advantages, including participation in future capital gains”. For every euro invested, participants will receive 1 share in Thai Café Invest. According to the company’s estimates and KPMG’s analysis, a share of 1 euro could be worth 1.71 euros in five years. A potential capital gain of around 71%, which of course depends on the group’s actual performance.

The group saw several reasons to opt for crowdfunding instead of simply turning to a bank.

'A capacity of 70 restaurants'

This type of financing technically allows Sabai Sabai to avoid increasing its debt burden and to maintain its room for manoeuvre. The managers also like the idea of “creating a community of investors among customers who believe in what we do”.

The capital raised will be used mainly for the furnishing of the premises, for recruitment, marketing and infrastructure. It should be noted that opening a new Thai Café takes on average 4 to 6 months and costs 450,000 euros. Two openings are already scheduled for this year, the establishment of which will cost less.

The group's managers believe that there is ample room for another 15 restaurants in Belgium, as their infrastructure is designed to supply up to 70 establishments. "The strength of Thai Café is mainly our central kitchen. All preparations are done in this workshop by a dozen Thai chefs. It is mainly thanks to this form of organization that we can maintain a consistent quality and taste," says Michel De Bloos.

The kitchen as a central part of the model

The entire Thai Café activity is based in a workshop in Vorst, where currently about a dozen people work. This central kitchen prepares about 2000 meals daily and processes in this way more than 150 tons of food products.

Thai cooking often involves time-consuming preparations, such as marinating. The central kitchen makes it possible to respect these techniques without time pressure and at the same time prevents waste.

Inventory control and centralized supply chain management allow Sabai Sabai to reduce surpluses and therefore losses. This leads to a more efficient purchasing process and consequently higher margins and higher returns. A single workshop also reduces the required kitchen space in each of the restaurants.

Management claims to have found a "tried and tested model" where the establishments reach full profitability by the end of the second year, with each restaurant benefiting from lower growth, depending on market trends and inflation.

The ingredients for a success story

“Gross margin is expected to remain stable as Thai Café has optimized all its suppliers, buying directly from local producers and importers of Asian products, thus avoiding additional indirect costs,” according to an information note. However, improvements are planned in the cost base. This will be the work of the future new COO, who is expected to ensure a more precise and sophisticated financial management of current and future activities.

Thai Café believes it is well positioned to surf on the expected changes in the European fast food market, social, technological and nutritional. These should lead to an annual growth of between 4 and 6%.

To this end, the Belgian chain from the Thai restaurant sector has already identified 60 locations with a 'largely underutilized growth potential'. 'Secondary' cities with 20,000 to 50,000 inhabitants with a higher prosperity index than average. We are talking about the area around Chaudfontaine, Koksijde, Rixensart, Watermael-Boitsfort, Westerlo, Gembloux, Braine-l'Alleud, Wavre and there are a few more ...

“Two will open before the summer and two more are already being talked about,” we hear at Thai Café.