Financing and Expansion of a Premium Restaurant Chain

The client had built a premium restaurant concept that worked: three locations in Madrid with consistent profitability, a loyal client base and a brand with real recognition in the premium segment. The concept was replicable and the team had identified five locations in Barcelona and Valencia that were ideal for expansion.

The problem was financing. The banks had rejected the financing requests citing the sector's risk and the company's limited track record as a group (each restaurant was a separate company). The client had explored private investors but had not found anyone willing to invest at a valuation that made sense for the founders.

LFGD was engaged to structure the financing and find the right investors. The challenge was to present the company in a way that made its real value visible: not three individual restaurants, but a scalable concept with a proven track record and a clear expansion plan.

The first step was the corporate restructuring: consolidation of the three restaurants under a single holding company, with standardised accounting and a consolidated profit and loss account that showed the real performance of the group as a whole.

With the restructuring complete, we prepared the investment documentation: financial model with three scenarios, expansion plan with detailed unit economics for each new location, brand analysis and competitive positioning. This documentation transformed the company from 'three restaurants' to 'a scalable concept'.

We identified three investors specialising in the F&B sector: a family office with experience in restaurant chains, a private equity fund focused on premium consumer brands and a strategic investor with a complementary distribution network. The competitive process generated two term sheets.

The selected structure was a convertible note of €2.4M, convertible into equity at the next financing round, with a 20% discount. This structure allowed the founders to maintain control during the expansion phase and defer the dilution until the company had a higher valuation.

The convertible note of €2.4M was signed five months after the start of the project. The implied valuation of €12M was four times the valuation that the founders had been offered by private investors before engaging LFGD.

The first two new locations in Barcelona opened 8 months after the financing closed. Both reached profitability in their fourth month of operation, ahead of the business plan projections.

The investor brought more than capital: his network of contacts in the premium F&B sector opened doors for supplier negotiations and brand collaborations that the founders had not been able to access on their own.