Raising for a hospitality business: cafés, restaurants, bars and bakeries
Why hospitality is fundable when the unit economics are visible, the numbers investors want per site, how to present a multi-site plan, what SEIS/EIS does and doesn't cover, and the debt-and-equity mix that usually works.
Investors are cautious about hospitality for a good reason — most restaurants fail — and enthusiastic about it for an equally good one: a format that works at one site and transfers to a second is one of the most repeatable businesses there is. The raise succeeds or fails on whether you can show the second kind, with numbers, per site.
The numbers investors want, per site
- Revenue per week, by site, for at least twelve months, with seasonality visible.
- Gross margin after food and drink cost (60–70% is typical; below 55% is a problem).
- Labour as a percentage of revenue (28–35% is normal; above 40% and the format is wrong).
- Rent as a percentage of revenue (under 10% is comfortable; above 15% is dangerous).
- Site-level EBITDA — what each site earns before head office. A café doing £550k a year at 14% site EBITDA is a £77k-a-year asset; that is what investors are buying more of.
- Fit-out cost and payback. £150k to open a site that makes £77k a year pays back in two years. That sentence is the whole investment case.
Presenting a multi-site plan
Investors fund the rollout, not the restaurant. The listing should show: site one's numbers (proof), site two's numbers (proof it transfers), the pipeline of leases (evidence), the fit-out cost and the ramp curve (how many weeks to reach mature revenue), and the central costs a group needs (a head of operations at site four, a finance function at site six). The forecast is built per site and summed. The cashflow tool on Find handles this if you treat each site as a hire with a start month and a revenue line.
SEIS/EIS and hospitality
Restaurants and cafés are qualifying trades; hotels and nursing homes are not. A new-site fit-out is qualifying growth spend. Advance assurance is usually straightforward for a trading hospitality business; get it, because hospitality investors are often SEIS-motivated individuals who know the sector.
The mix that usually works
Fit-outs are asset-heavy and partly financeable: asset finance for kitchen equipment, a bank or private-credit term loan secured on the trading sites, and equity for the working capital and the ramp period. A £400k rollout might be £150k asset finance, £100k term debt, £150k equity. Investors like seeing the equity stretched by debt, provided the debt service fits inside site EBITDA with room.
What kills hospitality raises
A single site with no evidence the format transfers. Labour costs that only work because the founder does sixty hours unpaid. Leases with personal guarantees nobody mentioned. A forecast that assumes site two matures in week one. And a founder who talks about the food rather than the numbers — investors assume the food is good; they want to know it makes money.
Questions founders ask
"We have one site and a second lease signed. Is that enough?"
It is enough to list. Site one's twelve months of numbers carry the case; the second lease is the use of funds. Be clear the second site is unproven.
"Franchise instead?"
Franchising needs a proven format across several sites first, and its own funding logic. Most investors would rather back three owned sites than a franchise programme at this stage.
"Investors want to see the kitchen."
Let them. A site visit converts hospitality investors better than any deck. Put the invitation in the listing.
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