Healthy fast-food chain Freshii Inc. appointed a new chief financial officer Tuesday, as it seeks to rebuild investor confidence after a long streak of disappointing results.
Daniel Haroun, most recently vice-president of finance at Walmart Canada, will join Freshii effective August 26, according to a company press release. “Dan has a strong strategic and operational background as a financial leader, with considerable experience in the franchised restaurant and retail spaces, which will be beneficial,” founder and CEO Matthew Corrin said in the release. Mr. Haroun will also be “providing overall strategic direction” along with Mr. Corrin, who controls the company through multiple voting shares and serves as chairman of the board.
Investors and analysts have been looking for Freshii, which oversees 446 stores in 16 countries, to bolster the strength of its leadership since the company failed to meet lofty targets set when it went public in January 2017. Tuesday’s announcement emphasized Mr. Haroun’s background, which also includes seven years in finance roles at Restaurant Brands International Inc., the owner of Tim Hortons. “That experience will no doubt be of great benefit to Freshii as we continue to plot and execute the next phases of our growth,” Freshii board member Jeff Burchell said in the release.
Previous Freshii CFO Craig De Pratto, who joined the company in 2014, left his post in May to pursue new opportunities. Freshii’s chief people officer left that same month.
Founded in 2005, Freshii was early to the healthy-eating trend in the quick-service sector, offering kale salads and quinoa bowls as alternatives to burgers and fries. Mr. Corrin aggressively expanded the chain, and franchises popped up across Canada and in countries such as Ecuador and Saudi Arabia.
At the time of its initial public offering, Freshii planned to more than triple its store count to 840 and projected system-wide sales of US$365-million by the end of fiscal 2019. But those plans quickly fizzled. Freshii slashed its targets within a few months of its IPO and withdrew forward-looking guidance entirely in November, 2018. That same month, Freshii cut staff at its Toronto headquarters by approximately 20 per cent to help drive profitability. The company has cited the “unpredictability” of selecting sites, obtaining permits and taking possession of properties as hindering expansion plans.
Freshii’s share price has sunk 79.6 per cent since the IPO and currently trades at $2.34 on the Toronto Stock Exchange. The company’s challenges have only grown as competition in the quick-service sector has increased. Newcomers have entered the fray, and established chains have added healthier fare to their own menus. Freshii’s same-store sales growth fell in each of the last three quarters.
On conference calls, Mr. Corrin has said Freshii is closing or transferring ownership of underperforming stores while continuing to open new locations, and that the company is putting more focus on revamping its menu. He has acknowledged the need to hire more leaders with past public-company and restaurant experience, too.
Despite Freshii’s challenges, some institutional investors still believe in the company. PenderFund Capital Management Ltd., based in Vancouver, has increased its stake in Freshii’s subordinate shares to approximately 13.5 per cent since October. “We continue to be supportive of the business,” president and CEO David Barr said in an email. “System growth continues, [along with] new store openings and a refocus on menu innovation.”
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