Michelin-starred Scottish restaurant the Plumed Horse has turned to its regular customers to help finance a move to Edinburgh.
The restaurant, which is moving from Crossmichael, near Dumfries, to the Scottish capital’s Leith district, has been turned into a limited company, with chef-proprietor Tony Borthwick selling a minority stake of the business to private investors.
He has sold off 20% of the business to regular customers, offering each investor a maximum of two 1% shares, each priced at £5,000.
Borthwick said that following the announcement in August of the restaurant’s relocation, a large number of customers wanted to offer financial backing to fund the move.
“I initially declined these offers as I didn’t want to lose control of the business I have worked so hard to build up,” he told Caterer. “But in turning the restaurant into a limited company and selling off a minority stake of 20%, I am able to gain the financial backing of the investors to fund the relocation and retain control of the business at the same time.”
Restaurant and bar consultant Michael Wild said such a move can prove very successful for restaurants. But he warned that investors sometimes “want to get too involved in the restaurant, with every shareholder thinking that they are the owner”.
Shareholders might also demand further shares of the business or the deferment of the payment of their bills for bringing in new customers, Wild said. “All these implications must be addressed before entering a venture such as this, as there is always the potential for things to become messy,” he said.
By Kerstin Kühn
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Published by: The Caterer