Announcement PDF 20 23 ANNUAL REPORT The heavy lifting in terms of the turnaround has been accomplished. We have a stable earnings base and a stronger balance sheet which, together with the resolution of legacy regulatory issues in December 2022, provides a firm platform to pursue growth opportunities Peter George Executive Chairman In This Report FY23 Highlights  III About Retail Food Group  IV Chairman’s Letter  VI RFG is Primed for Growth with a New Management Team  VIII CEO’s Report  X Our Growth Recipe  XVI Executing the Picture of Success  XVIII Creating a Seamless Omni-Channel Experience  XIX A Virtual Brand for a Virtual Age  XX Our Continuous Focus on Marketing  XXII Our Café, Coffee & Bakery Segment  XXIV Our Quick Service Restaurants Segment  XXVIII Driving Sustainable Growth  XXXII Corporate Directory  1 Directors’ Report  2 Auditor’s Independence Declaration  34 Consolidated Statement of Profit or Loss and Other Comprehensive Income  35 Consolidated Statement of Financial Position  36 Consolidated Statement of Changes in Equity  37 Consolidated Statement of Cash Flows  38 Notes to the Financial Statements  39 Directors’ Declaration  100 Independent Auditor’s Report to the Members of Retail Food Group Limited  101 Additional Stock Exchange Information  109 II 2023 ANNUAL REPORT “ “ A crucial element of our recipe for success includes constant development of new and exciting products. Joshua Smith Product Developer QSR FY23 Highlights Network Sales Growth 7.2% 26.0m $ on pcp up 21.0% on pcp Average Transaction Value 4 Underlying Revenue 1 2.4% 98.0m $ on pcp up 8.0% on pcp Same Store Sales Growth Net Debt 3 12.1% on pcp 1. Underlying EBITDA 2 88.7% on pcp to $2.1 million Underlying Revenue is a non-IFRS measure not subject to audit. Underlying Revenue excludes restricted domestic marketing fund revenues and the impacts of AASB 15 & 16 2. Underlying EBITDA is a non-IFRS measure not subject to audit. Underlying EBITDA excludes nonrecurring, non-core costs of legacy ACCC proceedings and associated legal fees, restructuring and non-cash impairments. Refer to FY23 Results Presentation released to the Australian Securities Exchange (ASX) on 23 August 2023 for a reconciliation of underlying to statutory results 3. Net Debt is calculated as current and non-current external borrowings less unrestricted cash 4. ATV refers to all trading outlets, on a same store basis ATV increased by 1.5% FY23 HIGHTLIGHTS 2023 ANNUAL REPORT III ABOUT RETAIL FOOD GROUP Retail Food Group is a global food and beverage company headquartered in Queensland, Australia. RFG is Australia’s largest multi-brand retail food and beverage franchise owner with a portfolio of quality franchise brands under its ownership (1) 33 >40m 10 >$500m 6800 c. COUNTRIES CONSUMER TRANSACTIONS BRANDS DOMESTIC NETWORK SALES ESTIMATED DOMESTIC NETWORK EMPLOYEES 1. IV GLOBAL TRADING OUTLETS Metrics at as 30 June 2023. 2023 ANNUAL REPORT 1300 ABOUT RETAIL FOOD GROUP ABOUT RETAIL FOOD GROUP 2023 ANNUAL REPORT V CHAIRMAN’S LETTER An Inflection Point It is my pleasure, on behalf of the Board, to present to you Retail Food Group’s 2023 Annual Report. I do so having reflected upon RFG’s journey since my appointment as Executive Chairman in late 2018. The enormity of the turnaround challenge which then lay before the Company was clear. Despite that challenge, made more complex by the recent pandemic, RFG continued to aspire to a brighter future guided by a ‘franchisee first’ philosophy and underpinned by a resilient core business. Since that time, we have established the right culture, the right structure, the right strategy and the right team. We have transformed the Company into a more nimble, franchisee and customer focused organization that enjoys a stable earnings base, a stronger balance sheet and, free of the shackles imposed by legacy regulatory challenges, a firm platform to pursue growth. 2023 therefore represents an inflection point for the Company – the heavy lifting in terms of RFG’s turnaround has been accomplished and we are now firmly focused on pursuing the many growth opportunities that lay before us. A Team to Harness Growth One of RFG’s strengths has been the development of a strong management team and talented staffing complement. The Company is therefore fortunate to have been in a position to promote from within when selecting Matt Marshall as Chief Executive Officer earlier this year. Matt is an exceptional leader and strategist who has played an integral role in implementing our ‘franchisee first’ and customer centric values and strategies, whilst driving strong operational outcomes in difficult retail environments. He is supported by a highly capable and experienced management team bolstered by recent appointments, including highly credentialled CFO Rob Shore, providing the Company with an appropriate blend of RFG tenure and new perspectives that will serve it well as it seeks out sustainable value creation for the Company’s stakeholders VI 2023 ANNUAL REPORT CHAIRMAN’S LETTER Enhancing the Board The Board has also been enhanced by the recent appointment of Mick Bulley and Jacinta Caithness as non-executive Directors, each of whom complement the breadth of capability and experience on the Board and ensure RFG remains appropriately structured and resourced to support the strategic oversight and ongoing governance requirements of the Group. With over 30 years’ experience at the ‘coal face’ of retail food in Australia, the majority of which as a highly successful RFG multi-site franchise partner, Mick’s appointment is not only aligned with the ‘franchisee first’ philosophy which drove RFG’s turnaround journey, but also brings valuable insight into franchise partner experiences. Similarly, Jacinta has enjoyed a notable career within the retail and franchising industries. Having contributed to the rapid growth of Boost Juice both domestically and overseas, Jacinta then built an impressive resume working with various brands, whilst also accumulating further valuable experience as a member of the Ventura Bus Lines and ASX listed Silk Laser Australia Limited boards. Both Mick and Jacinta are valuable additions to the Board and I warmly welcome them to RFG. Strengthening RFG’s Balance Sheet It is no less appropriate that I also welcome a number of respected institutional investors who joined the register via, and offer thanks to those existing shareholders who participated in, the Company’s 2023 capital raising. Particular thanks is extended to Washington H. Soul Pattinson and Company Limited for its support both as a shareholder and senior debt provider, and to RFG’s former senior debt lenders, National Australia Bank and Westpac Bank, for their past backing. Having raised c.$25.3m in new capital, supported by a new three year $20.0m secured debt facility, RFG has reset and strengthened its balance sheet, affording scope to pursue growth opportunities. Building a More Sustainable Business A New Chapter Those opportunities will be guided by an ESG framework established in FY23 to provide a clear ‘north star’ for the future development of our business in a way that adds sustainable value for all stakeholders. It is no secret that the retail marketplace remains challenging. This Annual Report bears testimony not only to the manner in which those challenges have been managed, but also as to how they are being overcome. RFG recognizes the need for all businesses to play their part in creating sustainable, longterm shareholder, employee, consumer, and societal value and the Company’s publication in December 2022 of its inaugural Sustainability Report demonstrated our commitment not only to unlock future growth, but to do so sustainably. RFG is in a stronger position today than it was 12 months ago. It embarks on the next chapter of its journey with confidence, having established a strong platform for delivering sustainable stakeholder rewards. Legacy Matters In December 2022, the Company achieved an important milestone with resolution of the ACCC’s Federal Court proceedings, without RFG making any admission as to the ACCC’s allegations in the proceedings, nor paying a pecuniary penalty or being subject to an injunction, disclosure or adverse publicity order. As part of the agreed resolution, RFG entered into an undertaking with the ACCC to waive franchisee debts of c.$1.8m and pay certain franchisees c.$8.0m. RFG also agreed to contribute $500K towards the ACCC’s costs. At the time of writing, the vast majority of these amounts have been paid, effectively drawing to a close legacy regulatory activity which had fettered RFG for almost five years, removing an uncertainty and constraint on the Company which allows our focus to shift towards growth. In terms of the Michel’s Patisserie class action, the Company was successful in obtaining orders from the Court striking out the applicant’s entire Statement of Claim. However, the Court provided the applicant leave to file a further Statement of Claim, which was filed in December 2022. RFG has filed a comprehensive Defence in the proceeding, and will continue to deny the allegations and vigorously defend the proceeding. In closing, on behalf of my fellow Directors, I would like to take this opportunity to extend thanks and appreciation to our franchise partners and master franchise partners for their ongoing efforts and faith in RFG’s roadmap for the future. I would also like to thank our team for their valuable contribution and ongoing commitment to delivering positive outcomes for RFG’s stakeholders, and lastly, to each of you, our shareholders, for your ongoing support of Retail Food Group Limited. Yours sincerely Peter George Executive Chairman Retail Food Group Limited CHAIRMAN’S LETTER 2023 ANNUAL REPORT VII RFG IS PRIMED FOR GROWTH WITH A NEW MANAGEMENT TEAM RFG boasts a highly capable management team with broad experience across multiple industries and disciplines. Recent appointments bring fresh perspectives and further enthusiasm for RFG’s growth plans. 8 6 7 2 4 5 Our Leadership Team 1 1. Matt Marshall Chief Executive Officer 9. Bren Gray Head of Procurement 2. Rob Shore Chief Financial Officer 10. Khloe Caneris Head of People and Culture 3. Adam Bailey Chief Information Officer 11. Mark Connors Director of Corporate Services and Company Secretary 4. Richard Spelman General Manager Coffee Not Shown 5. Leah Soutar Head of Brand Operations 6. Tom Elliott Head of Company Store Operations 7. Nicola Swarbrick Head of Growth 8. Kate McGrath Head of Marketing VIII 2023 ANNUAL REPORT Tanya Watt Chief Marketing Officer Ryan Chellingworth General Manager of Financial Performance and Commercial Krystal Taylor President RFG USA RFG IS PRIMED FOR GROWTH WITH A NEW MANAGEMENT TEAM 9 11 10 3 RFG IS PRIMED FOR GROWTH WITH A NEW MANAGEMENT TEAM 2023 ANNUAL REPORT IX CEO’S REPORT Turnaround Over – Return to Growth The financial year ended 30 June 2023 marked an important turning point for Retail Food Group as we continued to experience a rebound in customer count across our coffee and bakery brand systems, carrying through the momentum from the latter part of FY22. The COVID-19 pandemic was firmly put behind us as domestic network sales grew 7.2% to $502.5m, demonstrating the underlying resilience of our brands. We are excited to see results from various strategic initiatives, including the FY23 launch of a wholly new brand and concept, Rack ‘em Bones BBQ Ribs, to complement QSR Division operations and signal our intent to tap into new opportunities to harness growth for the benefit of our network. “ We also reset and strengthened the Company’s balance sheet, eliminating refinance risk in an uncertain credit market, providing RFG a fit for purpose non-amortising debt facility that provides flexibility to pursue capital-light growth opportunities, investment in technology, product innovation and enhanced customer experiences. We are firmly focused on delivering solutions to unlock growth and drive enhanced profitability for both our franchise partners and shareholders. “ X 2023 ANNUAL REPORT CEO’S REPORT Our Guiding Principles Underpinning the Company’s journey to this point have been four guiding principles: FRANCHISEE FIRST PEOPLE MATTER Each will continue to drive RFG’s sustainable growth creation for its stakeholders. Foremost amongst RFG’s guiding principles is our ‘franchisee first’ mindset and culture. It encapsulates our ongoing commitment to providing a support model for our franchise network underpinned by the strength of our brands, the quality and capability of our people, and a strong appreciation that our success is fundamentally linked to that of our franchise partners. CUSTOMER OBSESSED FUTURE FOCUSSED FY23 Domestic Network Performance A strong start to the year during the 1H23, as the Company’s coffee-based brand systems reported impressive outcomes against a heavily COVID-19 impacted prior comparative period (PCP), set the tone for positive full-year results. – FY23 domestic network sales grew 7.2% to $502.5m (FY22: $468.9m), supported by strong improvements across all key domestic network metrics; An obsession with our customers drives our aspirations to be more than a successful franchisor. We are committed to further evolving as a proactive and successful retailer, focused on retaining and exciting loyal customers, attracting new and diverse customers, and building brand relevance via innovation and access to new technologies, supported by training programs and operational standards that exceed expectations. – All brand systems enjoyed positive Same Store Sales (SSS) growth versus PCP, contributing to FY23 network SSS growth of +12.1% (FY22 SSS: +2.3%); In doing these things we recognize that our people are a critical factor for achieving sustained success and we are committed to creating an environment in which they can thrive by building capability in our teams, shaping leaders for tomorrow, and fostering a culture that embraces change whilst recognizing our achievements. – Average Transaction Value (ATV) grew 1.5% across same stores (FY22 +7.7%), or +2.4% on an ‘all stores’ basis. Despite this growth, which was aided by careful price management to combat inflationary pressures, ATV remains affordable, represents value for the consumer across our brands, and contributes to the underlying resilience of our network. RFG also operates in an evolving and highly competitive retail environment. We are committed to embracing the future and striving to unlock sustainable ways of growing for years to come. – Customer Count (CC) grew 10.5%, driven by strong performances in coffee and bakery brands as customers continued to return to more normal post-COVID shopping habits (FY22 CC: 5.0% decline); and Donut King was the stand-out performer amongst the Company’s brands during FY23, leveraging a number of strategic brand collaborations, seasonal promotions and customer engagement initiatives to grow network sales 26.6%, aided by strong CC and ATV growth of 19.0% and 6.5% respectively. CEO’S REPORT 2023 ANNUAL REPORT XI CEO’S REPORT CONT. Donut King’s clear positioning as the ‘Home of the Hot Cinnamon Donut’ continues to build brand relevance, utilizing June’s national donut day to engage with new audiences via the brand’s popular free hot cinnamon donut promotion, and hosting the ‘Donut King Housewarming Party’, a VIP media and influencer event that leveraged the social media reach of attendees and traditional media to grow new connections for the brand. Donut King performance, when coupled with strong SSS outcomes amongst Brumby’s Bakery (+6.0%) and Michel’s Patisserie (+15.5%), delivered an impressive 52.1% increase in FY23 underlying Bakery Café Division EBITDA, to $10.8m (FY22: $7.1m). The Coffee Retail Division likewise enjoyed strong FY23 underlying EBITDA growth of 45.6%, to $5.7m (FY22: $4.0m), underpinned by a robust performance by Gloria Jean’s, which grew SSS 20.1% vs PCP. A further highlight for the Company’s domestic franchising business was the 2H23 launch of an entirely new brand and concept – Rack ‘em Bones BBQ Ribs – following a successful 1H23 trial. As a ‘virtual’ brand we can leverage existing QSR Division outlet fixed costs and assets to maximize franchise partner profitability. With 42 outlets ‘in market’ by 30 June 2023, Rack ‘em Bones helped to offset challenging trading conditions for the QSR Division, with a fall in CC of 7.1% as the pizza category softened after unusually strong trading conditions during the pandemic. Despite the fall in CC, the Division achieved a 0.7% increase in SSS for FY23 (excluding the impact of Rack ‘em Bones) and an FY23 underlying EBITDA of $5.8m (FY22: $6.0m). Rack ‘em Bones helped to offset challenging trading conditions for the QSR Division “ “ XII 2023 ANNUAL REPORT CEO’S REPORT International Network & Coffee Division FY23 international network and coffee division underlying EBITDA contributions were $2.8m (FY22: $3.2m) and $0.9m (FY22: $1.2m). We have made significant organizational changes to lay the groundwork necessary to facilitate on-shoring international coffee roasting operations during the year ahead. Our master franchise partners reported 51 new outlets for FY23, together with a strong pipeline for continued growth within key markets. During FY23 we also laid the foundations to facilitate the reinvigoration of Gloria Jean’s USA network, which is targeting incremental network growth of c.100 outlets over a three-year horizon. We expect FY24 to represent a further year of investment in people and systems in anticipation of more tangible new outlet growth in FY25. On close of FY23, there were 599 international outlets operating within 32 countries across the globe. FY23 Group Results The core drivers of our future success will be The activities outlined above contributed to FY23 revenues of $120.8m, an 8.0% increase on PCP (FY22: $111.8m). – Brilliant Execution: Having the right assortment of products to meet the needs of our customers, defining the optimal way to present and market those products, and effectively communicating with consumers along the path to purchase to positively impact awareness, engagement and trigger purchase. Getting these things right represents our picture of success – it guides retail execution, drives strong unit economics, informs supply chain enhancement, and creates value for our stakeholders; RFG’s FY23 underlying EBITDA grew 21.0% on the PCP to $26.0m (FY22: $21.5m), with underlying NPAT of $22.6m, which was 22.3% up on FY22’s result (of $18.5m). On a statutory basis, FY23 EBITDA of $3.6m (FY22: $17.3m) led to a net loss after tax for the year of $8.9m (FY22: $5.3m profit), including the impact of legacy legal matters, including resolution of the ACCC proceedings, restructuring costs and non-cash impairments. Moving forward we will simplify our approach to reporting, focusing on two new segments: RFG’s QSR Division (incorporating Crust, Pizza Capers and Rack ‘em Bones), and a new Café, Coffee, Bakery segment (‘CCB’), which comprises the remainder of our portfolio. RFG’s Growth Platform RFG entered FY24 as an international food and beverage company with a diversified and vertically integrated business model that provides significant opportunities for growth. The work undertaken to improve our systems during RFG’s turnaround phase now provides a unique competitive advantage to leverage these adaptable retail systems at scale across all our brands. The systems employed across marketing, eCommerce, product development, operations and training, site selection and leasing, legal and franchise partner recruitment allow for all existing and future brands to leverage from the same disciplines. This allows us to deploy new initiatives with greater speed, leveraging innovation and insights to enhance operations for partners across the entirety of our dynamic franchise community, both at home and abroad. – Quality Systems Leveraging Scale: Implementation of systems which provide confidence in site and franchise partner selection, that leverage common back of house tools to enhance consumer experience and drive efficiencies, providing the opportunity to unlock organic and inorganic opportunities with confidence; and – Network Expansion: Targeted outlet growth amongst high performing brands across both franchise and company store operations, leveraging a capital light business model and supported by strategic international growth with selected brands, markets and quality partners. As we grow, we will take advantage of evolving retail tools, digital technologies, and new ways of doing business to create a compelling omnichannel experience that will deliver incremental, positive results for our stakeholders, including: – Leveraging data platforms to create more holistic consumer profiles and drive efficiencies in marketing spend and a more seamless customer experience; – Utilizing omni-channel marketing platforms to build brand relevance, nurture stronger connections with consumers, and to drive revenue conversion; and – Creating an intuitive and unified shopping experience across multiple channels that unlocks new revenue streams and facilitates scale and efficiency across each of our brand systems. Together these things create a compelling value proposition and firm platform upon which to pursue sustainable, long-term growth. CEO’S REPORT 2023 ANNUAL REPORT XIII CEO’S REPORT CONT. XIV 2023 ANNUAL REPORT CEO’S REPORT Success. Made. Simple. During the 1H24 we relaunched our approach to franchise partner recruitment with the maxim “Success. Made. Simple.” Immersed throughout our new recruitment collateral, this simple catchphrase encapsulates RFG’s franchise value proposition: a relatively low barrier to entry, iconic brands, a comprehensive support structure, and a ‘franchisee first’ commitment. Pleasingly, our value proposition is increasingly resonating with existing and potential franchise partners alike. Close to 120 franchise renewals were completed during FY23, evidencing confidence amongst our existing network in the future that we are creating. Additionally, further expansion of the Rack ‘em Bones BBQ Ribs concept is being pursued, providing additional impetus for exploring similar ‘virtual’ opportunities for application to our other brand systems. We have a healthy pipeline of potential franchise partner interest including 34 franchise applications approved as at 30 June 2023, and a further 148 in progress. We continue to develop relationships with lenders inclined to fund franchise partner growth alongside programs to support growth in our existing multi-site franchise partner complement, which exceeds 70 operators. Our outlet growth ambitions are not, however, limited to franchised outlets. We have invested considerable resources in establishing a corporate store portfolio that not only demonstrates brand system benchmarks and fosters retail mindsets, but also affords scope to assume operation of new and existing store locations. As will be evident from the above, in FY24 we are pursuing new outlet growth with a sense of urgency to reverse the reduction in outlets as we completed the right sizing of the network in FY23. The impact to network sales in the year ahead from FY23 outlet closures is already being offset by: – Quality traditional new outlet growth with the contribution to network sales from new outlets better than the average for the brand; – A positive same store sales trajectory amongst our CCB segment; and – Continued investment in our corporate store portfolio to drive retail standards and return on investment. Network sales, rather than outlet numbers, is the appropriate metric against which our domestic business should be measured. A New Dawn Over the course of RFG’s turnaround journey, we have built a much stronger business. Not only is it better able to meet the challenges of today’s evolving and highly competitive retail marketplace, it also offers a firm platform to pursue a much stronger FY24, and ultimately, a return to consistent long-term and sustainable growth. It goes without saying that this platform is built upon the continuing efforts and determination of our franchise partners, master franchise partners and team. Each have my heartfelt thanks for their belief in RFG’s systems and their enthusiasm for our future. I would also like to thank each of you, our shareholders, for your support of Retail Food Group. It is a privilege to have been given the opportunity to unlock the many growth opportunities inherent in the Company’s business model. It truly is a new dawn for RFG and we move forward with both confidence and excitement. Yours sincerely Matthew Marshall Chief Executive Officer Retail Food Group Limited – Expansion of Rack ‘em Bones BBQ Ribs; CEO’S REPORT 2023 ANNUAL REPORT XV OUR GROWTH RECIPE Execute Brilliantly – Strong unit economics – we make money when our Franchise Partners make money – Clear picture of success at store to manage core retail systems – Disciplined approach to category management – Active supplier engagement, reliability of supply and negotiation of contracts for value creation – New product innovation and renovation XVI 2023 ANNUAL REPORT OUR GROWTH RECIPE Quality Systems Leveraging Scale – Quality systems providing confidence in site and franchise partner selection, onboarding and operational support – Leverage common technology platforms across multiple brand systems to drive consumer experience and back office efficiency – Ability to unlock organic and inorganic opportunities with confidence Network Expansion – Targeted outlet growth in focused brands across all formats and channels – Capital light business model supported by strength of unit economics – Strategic international growth with selected brands, markets and quality partners – Profitable corporate store portfolio – Support multi-site operator expansion – Create new opportunities through manage to own programs and retail partnerships OUR GROWTH RECIPE 2023 ANNUAL REPORT XVII EXECUTING THE PICTURE OF SUCCESS Significant time and resources have been invested in establishing a clear picture of success for our retail outlets which guides brand standards execution, drives strong unit economics, informs supply chain enhancement, and creates value for our stakeholders. It contemplates the right range of products for each of our brands, the optimal instore display and broader promotion of those products, and clear communication to trigger customer engagement and purchase. Execution of our picture of success, coupled with network expansion and leveraging the quality systems redesigned during our turnaround phase are core drivers of our future growth strategy. Right Assortment 1 Have the right range of products to meet the needs of customers tailored by market. For example, sales in Gloria Jean’s are generated through three main categories. Ensuring the right product assortment across these categories is critical to executing the Picture of Success. 2 3 4 XVIII Right Placement Defining optimal location, space share and display layout for the cabinet. Right Promotion Brand promotions that positively change customer behaviour. Right Customer Communications Have clear customer communication messages along the path to purchase to impact awareness, engagement and trigger purchase. 2023 ANNUAL REPORT EXECUTING THE PICTURE OF SUCCESS 10 Hot Beverages 43% of Sales 10 Cold Beverages 32% of Sales 15 Food Items 20% of Sales Hot Spot Priority Zone All Occassion Flex Zone CREATING A SEAMLESS OMNI-CHANNEL EXPERIENCE Our customer strategy will create seamless omni-channel experiences that engage and delight, ensuring our customers have a connected and personalized brand experience that builds loyalty and repeat custom. 1 2 3 Customer Data Platform Unifies customer data from fragmented sources (website, social media, email, loyalty program data etc) to create more holistic customer profiles. More accurate data delivers more seamless customer experiences and more efficient marketing programs. eCOMMERCE AND VIRTUAL IN APP PURCHASES INFLUENCERS AND COLABS INSTORE KIOSKS DRIVE THRU FORMATS PHYSICAL STORES Omnichannel Marketing Tools Unifies customer data from fragmented sources (website, social media, email, loyalty program data etc) to create more holistic customer profiles. More accurate data delivers more seamless customer experiences and more efficient marketing programs. Create A Unified Shopping Experience Implementation of digital devices, including self-order kiosks, interactive menu boards, new Apps that deliver faster, more intuitive product experiences and ordering/ payments, and digital Loyalty Cards, all of which deliver a more consistent and controlled customer experience. CREATING A SEAMLESS OMNI-CHANNEL EXPERIENCE 2023 ANNUAL REPORT XIX A VIRTUAL BRAND FOR THE VIRTUAL AGE Providing pathways for franchise partners to grow their businesses and outlet portfolios is an important focus for us. This has led to development of new opportunities to leverage existing bricks and mortar outlets to harness virtual opportunities to expand customer appeal, increase market share and ‘sweat’ existing assets. Our first virtual brand, Rack ‘em Bones BBQ Ribs, is a persuasive demonstration of the potential to unlock incremental sales from existing fixed assets and provide franchise partners a further opportunity to grow their businesses. Rack ‘em Bones BBQ Ribs represents the first franchise brand added to RFG’s portfolio in almost 10 years, and the first to have been wholly designed and developed ‘in-house’. From concept, to 1H23 trial, to acceleration to 42 outlets at 30 June 2023, we have