Godfreys Group Ltd (ASX:GFY) will soon undergo a restructure of its store portfolio.
Up to 60 of its stores will be targeted for conversion to become franchise stores over a 3-year period.
The company says 18 stores will be converted this financial year, with the majority to be converted by mid next year.
Godfreys says the franchise model will result in improvements to EBITDA and its balance sheet. The company says there will also be immediate cashflow benefits – due to additional franchise fees, a reduced requirement for stock, and lower capital expenditure.
Godfreys posted a net profit of $7.8 million at 30 June 2016.