A taste for growth
Loan opens doors for dessert dining chain
We helped ambitious entrepreneurs Kaspa’s open a new store and expand their ‘sweets and treats’ franchise.
Entrepreneurs Syed Shah and Raja Mirzan are enjoying the sweet taste of success with the opening of their latest Kaspa’s dessert franchise in Darlington.
The duo now run three high-quality, colourful emporiums in the North East, offering mouth-watering waffles, real fruit gelatos, protein smoothies and much more.
Operating as S&M Traders, Syed and Raja’s trio of stores, which employ some 60 people, are part of the successful, UK-wide Kaspa’s franchise.
In the beginning
Syed and Raja’s business journey began in 2014 when they used their savings and borrowed money from relatives to raise £400,000 to open their first store in Newcastle.
“We identified a hole in the market,” explains Raja. “Newcastle has an amazing nightlife but not many places like Kaspa’s serving high-quality sweets and treats. We thought Kaspa’s could do really well there.”
They judged correctly and their 110-seat Kaspa’s outlet in Newcastle became so successful they launched a second 136-seat store in Sunderland in 2016 and, earlier this year, extended their franchise to Darlington.
Raja says: “People used to travel in from Darlington to visit us in Newcastle and Sunderland, so we gave Darlington its very own Kaspa’s.”
Their expansion is measured, “We’re in it for the long haul,” he says, “proceeding carefully and making sure each business is stable and profitable before taking the next step.”
However, Darlington marked the start of a different approach for them because, rather than leasing the premises, they bought the freehold, complete with two flats above the restaurant to provide additional rental income.
Syed and Raja were able to fund their expansion using loan facilities from our £500m Northern Powerhouse Fund (NPF), specifically aimed at supporting business growth across the north of England.
Since 2014, the business has built up a great relationship with Barclays Business Manager Martin Griggs. He offered them an unsecured overdraft for the initial premises, a mortgage to buy the Darlington freehold and a further £75,000 loan for fixtures and fittings using our Northern Powerhouse Fund.
“Our aim for Darlington was to add to the assets of our business. That’s why we bought our new outlet rather than renting,” says Syed. “Martin’s always been highly supportive. He really saw the value and the potential of the business. That’s a key reason we chose to work with Barclays.”
Martin says: “I’m very pleased to be working with Syed and Raja, and the unsecured loan is testament to the strength of their business. Supporting strong franchise businesses like this is important and I hope to back them with their future growth plans.”
The business is now looking to build on its success with stores in York and Carlisle and the owners’ ambitions even extend internationally, having acquired the rights to a franchise in Pakistan.
“We’ve learned a lot in five years and have developed a good business model. With good, solid funding behind us, we’re confident about the future.”
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