Frost & Roll Creamery Business Plan — Returns, Scenarios & Sensitivity

Equity returns

On the base-case ramp, the business generates R34.6 million of EBITDA by Year 5. At branded-QSR and franchise exit multiples of 8×–12× EV/EBITDA, and given the net-cash balance sheet, the equity value at a Year-5 exit implies very high multiples on the R16 million invested. These headline figures must, however, be read with real caution, they are amplified by an unusually small equity base, and are contingent on delivering an aggressive ramp of a trend-led concept and on the rollout being financed largely from reinvested cash and asset-light franchising.

Measure	8× exit	10× exit	12× exit
Year-5 EBITDA (R m)	34.6	34.6	34.6
Enterprise value (R m)	277	346	415
Add: net cash (R m)	29.7	29.7	29.7
Equity value (R m)	307	376	445
MOIC (×)	19.2×	23.5×	27.8×
Equity IRR	109.2%	120.1%	129.6%

Figure 20. *Equity value at Year-5 exit across EV/EBITDA multiples.*

Key findingRead the returns with real discipline

The headline multiples look extraordinary because a very small R16m equity base scales into a substantial EBITDA on an all-equity, net-cash structure. Two cautions are essential. First, they depend on the novel, trend-led concept proving out and the aggressive ramp delivering. Second, and importantly, the modelled rollout assumes company expansion is funded from reinvested cash and that franchising is genuinely asset-light; a faster or more company-owned national rollout would require follow-on equity that dilutes the initial holders and lowers realised returns. Investors should underwrite the downside case below and treat the headline multiples as an upside ceiling, not an expectation.

Scenario analysis

Parameter	Downside	Base	Upside
Year-5 revenue (R m)	90	125	140
Year-5 EBITDA (R m)	24.2	34.6	37.7
Driver	Trend fades / slow franchise; −3 pts	Sponsor plan	Fast franchise & retail; +2 pts
Additional capital	Likely required	None	None

Figure 21. *Year-5 revenue and EBITDA across scenarios.*

Sensitivity

Equity returns are most sensitive to the exit multiple and to the revenue ramp (a function of footfall, average ticket and rollout pace), then to the franchise and packaged mix and EBITDA margin; seasonality is a meaningful swing factor. The pattern reinforces the central message: value is created by proving the concept, building a durable brand, scaling the higher-margin franchise and packaged businesses, and exiting a proven, branded platform that a strategic buyer will pay a full multiple for, brand and execution, not financial engineering.

Figure 23. *Revenue headroom above break-even.*

Exit strategy and value realisation

Frost & Roll is being built as a branded, franchisable platform with several realisation routes. The most probable is a trade sale to a larger food, franchise or hospitality group seeking a differentiated experiential dessert brand with a proven concept, a multi-format footprint and asset-light franchise and packaged income. A private-equity recapitalisation is a natural alternative, providing partial liquidity to founders and early investors while funding the next phase of the rollout. Because the business is net-cash and profitable, continued owner-operation with dividend distributions is a credible default that avoids a forced sale. Value is maximised by proving and systematising the flagship, demonstrating repeatability across formats and cities, and establishing early franchise and packaged-product traction before a formal process.