This Offer is conditional on Mad Group confirming the debt structure changes to their future funding requirements with their bankers. It is also conditional on Mad Group raising a minimum of $500,000 through this Snowball Effect Offer, with any shortfall to be raised from existing shareholders on the same terms as the Offer.
These conditions are to be confirmed by July 20th and in the event that they are not, Snowball Effect will refund investor’s funds and this offer will end.
Dear Snowball Investor,
You are receiving this as one of the 92 people who invested in the Mad Group offer – thank you for your support!
Unfortunately we did not reach the minimum investment level of $750,000 that we sought under the offer. This means that the offer has closed and your money that you’ve paid to Snowball will be refunded shortly.
The good news, however, is that we’ve been busy over the past few weeks formulating a Plan B in case we did come up short.
Plan B involves a new offer (attached), which is very similar to the original but with a lower investment target of $200,000. We intend to raise a minimum of $500,000 over the next few weeks, primarily from this new Snowball raise with any shortfall to be raised from existing or new shareholders, which will be arranged by Mad Group on the same terms as this offer, within the next 5 weeks.
With this new lower investment threshold we are looking to structure the new Mad Mex store debt in a different way with our bank. This proposal structures the new debt as a 1-year interest only facility that moves to a 5-year term loan in September next year. The improvement in cash-flow from these changes to the loan terms offsets the shortfall of the capital raising.
Through recent conversations with our bankers, we are confident that we can secure the required bank funding on the terms set out above which allow the company to achieve the forecasts attached. We envisage that we can secure this in the next 2 weeks.
The changes in the forecasts can be found on pages 12-14 of the attached new offer document. Specifically, these relate to:
The new offer is otherwise on the same terms as the original, however is only open for 7 days so I’d encourage you to secure your investment quickly.
As you will likely know, Habitual Fix signed a Memorandum of Understanding with a USA partner last month and we are confident that formal commercial arrangements will be finalised in the next 3 months. We have elected not to update these forecasts to reflect this USA development, however note that it would add approximately $400,000 to EBITDA for FY16 if the deal closes. While it will take a few years to start contributing meaningful regular monthly royalties, by year 5 the annual royalty would be around $500,000 and $1M per year-by-year 10. We are currently planning our first trip over to the US to begin planning the roll out strategy with the local partner.
Under this new private offer, we have allowed ourselves a maximum 5 weeks to secure the required bank funding and a minimum $500,000 of new investment on the terms outlined above. Your funds will remain in Snowball’s trust account until we provide confirmation that the new bank loan terms have been secured. In the event that this cannot be achieved, your investments will be returned to you.
If you invest in this new offer, Snowball will not deduct your new investment funds until they have refunded your original investment. You may invest any amount you wish in this new offer, meaning you are able to increase your investment if you wish.
We hope you’ll sign back on for the ride on this new private offer and I look forward to meeting with you all when this is all finalised. As always I am more than happy to speak with you if you have any questions with relation to this offer or any other matter.
Thanks again, your investment is sincerely appreciate it and will allow us to continue our rapid expansion.
Group Managing Director
021 428 970
If you think ‘Mad Group’ sounds like the name of a support network for addicts, fanatics and individuals known for mad impulsive behaviour, then you’d be on the money. Two extremely passionate brands under one shelter.
Any iteration of the mantra ‘mad about food’ sums up what Mad Group is about, be it crazy hungry or seriously committed.
As one of NZ’s fastest growing companies and with a robust business model that has been proven over the past 7 years, Mad Group is now poised for further significant growth both domestically and internationally.
Mad Group is a very promising company that is professionally run by seasoned industry veterans and has a very impressive growth history and trajectory.
The group is armed with mad skills, so here’s what you need to know before approaching:
The Habitual Fix story began when James Tucker and Tim Benest, despite being politely informed they would be mad to open during a financial crash, cut the ribbon on their first store in Auckland in 2008. Fed up with other fresh food stores not being what they were claiming to be, and after a 12-month process of selecting only the freshest growers and producers to provide the finest ingredients, the duo made a vow to turn us into a nation of Fresh Food Addicts.
After deciding to franchise in 2010, Habitual Fix is now 15 hook-up-joints strong in the North Island with the addiction ready to spread due south and to many other latitudes and longitudes in the near future with international expansion a very real possibility and a massive opportunity.
Mad Mex has established itself at the forefront of one of the fastest growing segments of the market since appearing on the local scene. This came about when a ‘hangry-for-decent-Mexican’ James Tucker realised that even though the Mexican Revolution was on the rise in NZ, it was the norm in Sydney to expect great Mexican food wherever you were. Even to the point that in Sydney, ‘great Mexican food’ is just referred to as ‘Mexican food’. In 2013, on the verge of going loco from travelling back and forth to Sydney to get a decent burrito, James had an Epifanía - buy the licence for Mad Mex and bring home every Kiwi’s right to decent Mexican fare.
By the end of 2014, Mad Mex NZ had opened 6 stores, Mad Group had scored 8th place in the Deloitte fast 50 and between both brands they’d racked up 723 per cent growth. And 2015 is showing no sign of letting up. While all Habitual Fix stores are franchised, Mad Group own all of the Mad Mex NZ stores.
Mad Mex is a proven model in Australia with over 45 stores operating, something which Mad Group will continue to take a lot of learning from.
Together as Mad Group the aim is to raise between $200,000 and $1,500,000 which represents a maximum stake of 13.3% — an investment which will be used primarily to grow the Mad Mex business.
Mad Group’s vision is to grow into 100+ stores across 3-4 brands, both franchised and company owned, over the next 5 years.
So how do the mad ones fit in the local scene? Mad Mex has answered the nation’s call and is at the forefront of the Mexican revolution. Fast, fresh, authentic and damn tasty! Habitual Fix continues with their vow to create a nation of ‘food junkies, not junk foodies’ with nothing to hide and everything on display. Both passionately provide a healthy, fast, high quality option allowing customers to customise and choose how they roll. Or wrap.
The Mad crew boasts experience across multiple brands being highly skilled in designing and implementing restaurant management systems. This ensures they know all about industry metrics be it franchise sales, franchise systems and management, frontline team member training, management training systems, as well as being masters in real estate selection & negotiation. These are what they refer to as their Critical Success Factors.
The Directors, Advisory Board and executive shareholders all intend to remain in their roles for at least the duration of this 3-year strategic plan. The Advisory Board and Directors endeavour to meet monthly though often communicate on a daily basis. The Remuneration Committee, chaired by Justin, sets senior management and directors salaries/fees at fair and reasonable market rates.
It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.