Retail Food Group expands coffee franchise

Retail Food Group (ASX:RFG) has announced its acquisition of CIBO Espresso, a boutique coffee franchise. The deal, worth $2.7 million, aims to expand RFG's footprint in South Australia. The acquisition will be funded through existing cash reserves and is set to be completed by mid-FY25. It is expected to be accretive by FY26.

Strategic acquisition and future outlook

Retail Food Group's acquisition of CIBO Espresso is a strategic move to strengthen its coffee franchise operations. The acquisition is expected to leverage RFG's coffee supply synergies and capitalize on CIBO's experienced franchise network. RFG plans a $1.3 million investment to transition CIBO Espresso Franchise Partners to the Gloria Jean's brand, enhancing offerings with new products and an expanded marketing fund. This move aligns with RFG's strategy to expand core brands within the Café, Coffee, and Bakery channel, particularly boosting the Gloria Jean's brand. The transaction is expected to be completed by mid-FY25, with financial benefits anticipated by FY26.

Executive commentary on strategic acquisition

The acquisition's alignment with our strategic goal of growing core brands and positioning Gloria Jean's as a leading global beverage destination is emphasized.