FFA raising funds for Semsom

The eatery to open 200 US outlets by 2020

Semsom has mandated FFA Private Bank’s Investment Banking division to advise on funding the company’s expansion into the US market.

“Our plan is to open 200 outlets by 2020 in the American market,” said Christine Sfeir, CEO of Treats Holding, owner of the concept.

To finance its expansion, Semsom is seeking to raise $4 million from new investors as part of a first phase capital injection, with a second phase planned for 2016 to continue its growth.

Julien Khabbaz, Head of Investment Banking at FFA Private Bank said that the second round will get additional $2 million or more. “We have a big chunk of money that will derive from franchisees and from the outlets.” According to FFA, the Internal Rate of Return (IRR) is projected at 31 percent and could reach up to 42 percent over a period of seven years.

Khabbaz said that 20 to 40 outlets will be company owned and managed whereas the rest will be franchised but overseen by the company. “Outlets in New York, Boston, and Washington for example will be company owned, whereas the rest, opening in Miami or Texas for instance will be franchised.”

FFA has already started fundraising and the transaction will be closed by mid-April. “The first Semsom outlet will open in New York by Q4 2014,” Khabbaz said.

The US restaurant market lacks a Lebanese cuisine dominant player. As the trend towards healthy ethnic food increases, Semsom is looking to seize the opportunity to become the first Lebanese restaurant chain in the US. “It is the right concept in the right market,” Khabbaz said. According to him, Sfeir has the right procedures which will lead her to reach international success.

In Saudi Arabia, the eatery plans to open an additional branch in Jeddah, to total three. It will also enter Riyadh with two new branches.

The brand accessed the Kuwaiti market for the first time in January. The franchisee is Sabeco, whose managing partner is Lebanese national, Jihad Mekawi. A new entry for Semsom is also expected in Oman. Sfeir said that more outlets are under study and negotiation for the region.

Another food concept by Treats, Green Falafel, will also branch out to Saudi Arabia, in the summer of 2014. “We are through our final negotiation phase to open 15 outlets in 18 months.”