By Angela Green, Content Executive, H&C News: Burger King acquires 74 restaurants from Karali Group.
Burger King UK has announced the indirect acquisition of 74 Burger King restaurants from its second largest franchise partner, Karali Group. The deal will increase BKUK’s directly owned portfolio to 266 restaurants, half of its 533 strong UK store estate.
New financing enables Burger King UK to commit to growth, supporting plans to expand its owned and sub-franchised restaurant portfolio from 533 to over 700 by 2026.
The expansion targets will be achieved through new restaurant openings, and with bullish targets of one restaurant opening per week until the end of 2022, alongside franchise acquisitions.
The acquired portfolio will add to BKUK’s diverse multi-format estate, with the new stores spanning 36 Drive-Thru, 9 In-Line, 27 Shopping Centre and 2 Leisure restaurants. The acquired portfolio performed well in recent years, demonstrating resilience to the impact of the Covid-19 pandemic.
BKUK plans to further energise the newly acquired restaurants, incorporating them into its major remodelling programme to deliver an improved customer experience and new visual identity, including pre-order digital kiosks and digital menu screens.
Underpinning this growth strategy, BKUK’s new financing has been secured from three blue-chip lenders. They comprise the business’ two existing lenders National Westminster Banks Plc and Rabobank London, alongside new lender AIG. The fixed-term financing replaces the business’ previous credit facility, secured at the end of 2021.
Since the start of 2021, BKUK has added 701 owned restaurants to its estate comprising 391 new restaurant openings and the acquisition of 31 sub-franchised restaurants. BKUK’s leadership team continue to see significant market opportunity for BKUK and remain focused on delivering against an ambitious set of growth plans.
Alasdair Murdoch, CEO at BKUK said: “The acquisition of Karali – the largest consolidation BKUK has made – marks an important milestone for the business, bringing more restaurants under our ownership, enhancing value and driving operational efficiencies. We believe that we have a strong expansion pipeline and are well positioned to take advantage of the clear market opportunities ahead.
“I would like to thank the team at Karali, led by owner and managing director Salim Janmohamed, for their contribution to the Burger King presence in the UK for over four decades. As one of the longest standing franchise partners, Karali’s dedicated team have ensured Burger King stores continue to best serve our customers while achieving impressive growth. We look forward to welcoming our new colleagues to the core BKUK team and delivering on the exciting growth plans for the business.”
Salim Janmohamed, Owner and Managing Director at Karali said: “Over the course of our long-standing partnership with the Burger King brand, Karali worked tirelessly over 15 years to build a substantial, balanced portfolio of Burger King franchise stores and achieve its success today. This nation-wide, 74-restaurant portfolio is performing exceptionally well based on a resilient financial platform and supported by strong operational management, a first class team, and a growing customer base. We are pleased to support this transaction to ensure Burger King UK can continue to enhance the value of this impressive portfolio with the support of its expert leadership team and the dedicated workforce employed today.”