IN BRIEF: Safestay signs franchising deal for two 'alpine' properties
Safestay PLC - London-based hostel operator - Announces the signing of its first franchise agreement effective from September 1, with hostel owner and operator Sycomore Entwicklungen GmbH. Contract has an initial term of five years with an option to extend for a further five years, and covers two hostels in ‘the sought-after alpine resort of Kitzbuhel, Austria’. Says Kitzbuhel is ‘an ideal location for Safestay to broaden its reach beyond its core market of city centres in major European capitals’, due to its ‘world-class ski facilities and summer attractions’. Company is entitled to guaranteed fixed annual payments and additional performance-based fees. Franchising ‘offers reduced capital requirements while allowing Safestay to leverage its established international brand, marketing reach and operational capabilities to drive incremental growth,’ Safestay adds.
‘Our first franchise agreement is an exciting opportunity for Safestay as we continue to execute against our ambitions to double the size of our portfolio over the medium term,’ Chair Larry Lipman comments. ‘Supplementing our core freehold and leasehold expansion strategy with capital-light, flexible growth opportunities, such as franchising, offers exciting new routes to market that are financially attractive and leverage our strengths as an established, international brand in the fast-growing but highly fragmented global hostel market.’
Current stock price: 23.90 pence, up 3.9% on Monday in London
12-month change: up 14%
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