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Mon 17th Jun 2013 - Five Guys, Giggling Squid and Pizza Hut

Story of the day:

Charles Dunstone reveals story behind Five Guys backing: Entrepreneur Charles Dunstone has explained how he has come to be UK franchisor of the Five Guys better burger chain. He plans to open five sites in London in a deal that sees him split investment and profit with the US founders. He told The London Evening Standard: “Three years ago I was in Manhattan. I’d read an article in The Wall Street Journal about Five Guys and decided to go into one at Rockefeller Plaza for lunch. The product was unbelievable and everyone was there – guys in hard hats, guys in pinstripe suits, lots of women. I went to see the owners and we shook hands on a deal to bring it to Britain. Everyone knows the high street is struggling. The internet is killing some firms, even big chains. New, smaller businesses, mom ’n’ pop outfits, new chains like Five Guys are taking the place of the big names. The high street is going back to being more entrepreneurial, more diverse. It’s going to be a much more interesting place and I want to be part of it. The market for honest, tasty food at a good price is huge and growing. People always say that food in Britain has got so much better at the top but it’s just as true at the bottom. “No freezers, no microwave, no can-openers” is our motto. Not all our rivals can say the same. Some use frozen, pre-chopped potatoes. Some use frozen beef. We’ve been driving suppliers mad trying to get the perfect flavour of bacon and the perfect bun but it will be worth it. Burgers are a fun treat, not a staple diet. We don’t advertise to children. We don’t have a kids’ menu. We don’t deliver. If you come in, there is choice. There are little burgers, if you want a smaller size. You can drink water.

Industry news:

Community pub minister clamps down on council demand for pubs CCTV: Community pubs minister Brandon Lewis has laid a new code of practice before Parliament, a part of the Protection of Freedoms Act 2012, aimed at ending blanket demands by councils for pubs to install CCTV. Lewis said: “CCTV has a role to play in stopping and deterring crime in anti-social behaviour hotspots. But well-run pubs that don’t have a public order problem shouldn’t be tarred with the same brush. The public deserves to have pint in peace without being snooped on. The government has called time on big brother’s secret, intrusive and costly rules that have forced pub landlords to pay to install CCTV where it is was not needed.” 

Nick Bish hands reins over to new chief executive: Out-going ALMR chief executive Nick Bish has officially handed over the reins to new chief executive David McHattie: Bish told members: “I am delighted to confirm that the final part of the handover to David McHattie is now complete and he is fully established as chief executive of the ALMR. I will be still around on a non-executive basis to help where I can on ALMR projects and industry contact and so I look forward to remaining in touch with you all. But this is a good moment to say thank you to everyone who has, recently or over many years, given me support in creating a great organisation for the members themselves and for our industry as a whole. It’s been exciting to do and a pleasure to work with wonderful, talented colleagues in the team and unselfish, energetic and humorous people throughout the membership.” The ALMR has become the key trade body for managed operators with Mitchells & Butlers, JD Wetherspoon, Spirit Pub Company and TGI Friday’s among the 160 member companies. 

JD Wetherspoon tells customers about its property litigation: Managed operator JD Wetherspoon has told customers about its eight-year battle over a property fraud involving its former agent Van de Berg. The company devotes several pages on the current edition of its in-pub magazine, Wetherspoon News, to the issue. It reprinted the article that founder Tim Martin wrote for Propel Info on the subject, plus comment from property magazine Estates Gazette and Financial Times columnist Luke Johnson. 

David Cameron leaves £50 tip at PizzaExpress site: Prime Minister David Cameron is reported to have left a £50 tip at a Soho branch of PizzaExpress after watching a portrayal of himself in the West End play The Audience. The Prime Minister and his wife ordered a £12.75 rustichella pizza while Samantha Cameron chose a £10.90 lasagna classica. They shared a bottle of red wine and a portion of dough bills, with the bill thought to come to £45. 

New invention combines cork stopper and screwcap: A new invention, the Helix, combines the tradition of a cork stopper with the convenience of a screw cap. It comes with a bottle that which has a matching thread so it can be tightly resealed to keep contents fresh. The innovative design is the result of partnership work between Amorim, the world’s largest cork manufacturer and O-I, the biggest global maker of glass containers. 

Company news:

Punch lenders to meet to consider an alternative proposal: The Sunday Telegraph has reported that Punch Taverns’ senior lenders are to meet this week to consider an alternative proposal to the company’s plan to reduce debt at the company. The newspaper claimed that tensions over Punch’s debt reduction proposals are expected to flare further this week amid calls from some bondholders for directors of the public company to step down from its board to oversee the securitisations. The Telegraph added: “It is understood that some stakeholders are concerned about a conflict of interest if a director sits on both the boards of Punch A and Punch B and the board of the public company, where there is a fiduciary duty towards the shareholders. Punch has rebuffed the call, meaning the two sides are at odds.”

Benugo eyes overseas expansion: Coffee bar and restaurant chain Benugo, that serves visitors to London’s V&A museum, the BFI Southbank and Edinburgh Castle in Scotland, will open 15 more of its New York-style delis in the next three years – and look at expansion overseas. The company, which began as a bar in London’s Clerkenwell district in 1998, has recently opened ten cafes in London railway stations and high streets in addition to its concessions in museums, galleries and historic buildings. But it would also like to expand its operation across Europe. Alastair Storey, chief executive and chairman of Westbury Street Holdings, the parent company, told The Financial Times: “We’re not going to go crazy but we’re planning to open four or five a year over the new few years. Although we’ve got good growth in the UK right now, we’ll definitely look at overseas expansion in the medium term.” Sales at Benugo, rose 28.2% to £56.5m in the year to 30 December.

Paul Walsh set to become Compass chairman: Paul Walsh, the chief executive of Diageo who is stepping down after 13 years running the company, is to replace Sir Roy Gardener as chairman of contract caterer Compass. Walsh has been chosen to help with speeding up international expansion. The Diageo boss is also expected to become chairman of Avanti Communications, the AIM-listed satellite company. 

JD Wetherspoon gets planning go-ahead in Eastwood: JD Wetherspoon has obtained planning consent for a £1m pub in Eastwood. The company will convert a former car dealership on Nottingham Road into a new site. Plans for the Wetherspoon, at the old G&M Motors site, were met with mixed feelings in the town earlier this year. Some people said the town did not need another pub or restaurant, but others said it was great value for money and ‘anything to boost the town’s trade’. Eastwood is a former coal mining town in Nottinghamshire with a population of 18,000.

Pret A Manger founder plans aggressive push for popcorn: Metcalfe’s Food Company, the business founded by former by Pret A Manger owner Julian Metcalfe, is readying a flurry of marketing activity for its Skinny Topcorn popcorn brand as it prepares to announce its first celebrity brand ambassador to achieve a more mainstream appeal. The ambassador would be the figurehead of the Skinny Topcorn brand’s expansion efforts as it looks to diversify into other corn-based products such as tortilla-style corn chips and corn cakes. The business hopes to replicate the success of drinks brand Vita Coco’s tie-up with singer Rihanna after interest in the low calorie range peaked following its appearance on the Beyonce documentary “Life is Bit a Dream” earlier this year. The company claims the UK savoury popcorn market is worth around £60m and is growing 20% year-on-year.

Banwell Pub Company – pragmatic approach to Varsity: Roger Moxham, chief executive of 181-strong Banwell Pub Company, has told Propel that the company is taking a pragmatic approach to its 14-strong student brand Varsity. The company’s new brand, Wild Lime Bar and Kitchen, opened last week in a former Varsity site in Southampton. Moxham said that the student market remained big users of pubs and bars but it was unlikely that Banwell would open another Varsity. The company has recently invested in its Cardiff Varsity whilst the Gloucester site has been debranded. Meanwhile, Banwell will re-open its second major London project, The Nag’s Head, on 27 June. The site is a Star Pubs and Bars leasehold and the offer will focus on premium spirits and cocktails, and a salt beef food offer that has been successful at the company’s Longroom site. 

Glendola Leisure plans Waxy’s for Edinburgh: Glendola Leisure, headed by Alex Salussolia, is set to convert the historic Charlotte Chapel in Edinburgh into a 900-capacity, five-storey venue. Glendola already operates owns Frankenstein’s on George IV Bridge. Three Waxy O’Connor’s bars have opened – at London, Manchester and Glasgow – in the last two decades and Glendola has been working on launching an Edinburgh version for three years. Euan Robb, a spokesman for Waxy O’Connor’s, said once completed the venue “would be one of the most iconic” in Edinburgh. He said: “The Charlotte Chapel building is a massive space and while there will be some re-configuration done I don’t doubt when it’s completed that it will be a fantastic-looking venue. The decor is constructed out of old salvaged material from houses and churches – it’s very wooden and ornate.”

Marston’s submits Chesham new build plan: Midlands based brewer and retailer Marston’s has submitted a planning application to Chiltern District Council to turn the former site of Merritts Chesham, in Ashley Green Road, Chesham into a pub and restaurant with an outdoor area including a play area and a car park. A decision is expected to be made by the council’s committee before Wednesday, 24 July.

Pizza Hut appoints Paddy McGuinness as brand ambassador: Pizza Hut has hired Take Me Out host Paddy McGuinness as its new brand ambassador as it celebrate the fortieth year since it launched in the UK. Pizza Hut director of HR and marketing Kathryn Austin added: “Paddy is the perfect fit for Pizza Hut Restaurants, his fun-loving personality reflects our style and brand ethos so he was a natural choice. We are thrilled he’s come on board to help us with an exciting upcoming campaign to celebrate 40 years and the next chapter of Pizza Hut Restaurants - so watch this space.”

Prezzo set for Bromley South Central: Prezzo has acquired a new 3,767 sq ft restaurant at Bromley South Central in Kent. The restaurant will trade alongside other well-known brands including Las Iguanas and Nando’s as well as a nine-screen Vue cinema and a 130 bed Premier Inn hotel. The mixed-use scheme also includes 200 new apartments and is due to be completed in autumn 2014. Brandon Elmon, director at Davis Coffer Lyons, which worked for Prezzo on the deal, said: “We are currently in the process of finalising another deal for the company, which we hope to be able to announce later this summer.”

Greene King buys back £60m of bonds: Suffolk-based brewer and retailer Greene King has bought back £60 million of bonds to avoid a step-up in the interest it pays on them, which would have kicked in this week. It said it had raised its bank loan facilities to fund the purchase and extended the length of that facility to June 2018. Finance director Matthew Fearn said the facility provided “certainty over financing”.

Frederic Robinson reports pre-tax profits up 86%: Cheshire brewer and retailer Frederic Robinson has reported pre-tax profits up 86.1% to £3.4m in 2012. Turnover increased 4% to £56.1m. The company sold 17 pubs for £2.3m in the year, producing a profit of £1.7m. Operating profit rose to £1.5m. Chairman Pete Robinson reported that “appalling” summer weather had “a serious affect” on north Wales pubs with many visitors cutting short their summer holidays. 

Brewdog launch spirit made from beer: Scottish brewer and retailer Brewdog, has launched a new style of spirit given the name of WattDickie. Created through a radical brewing and ice-distillation process, kept secret until its patent is approved, the new 35% ABV spirit, created using an IPA style beer, has been given its first public outing in the 12 Brewdog bars and at the brewery’s online store Brewdog.com/shop later this month. WattDickie will be sold in 6cl bottles and will retail at £2.99. Brewdog plan to make the drink available in 700ml bottles later this year. The company said WattDickie will remain separate from the Brewdog brand – a new spirit with its own unique brand.

Cosmo – Derby site is a template for next set of openings: Buffet restaurant chain Cosmo has described its £1m 15,000 square foot Derby opening, in the former Zanzibar nightclub, as a template for its next five openings. The up-sized concept will be replicated in Edinburgh, Preston, Nottingham, Sheffield and Leeds, Operations director Kan Koo said: “We have spent in excess of £1 million on Cosmo Derby and it is now the flagship model for all further venues across the UK.” The Derby restaurant seats 330 diners, who can chose from 180 dishes.

Warwickshire freehold investment on the market for £3.9m: A popular hotel in Warwickshire has been put on the market with an asking price of about £3.9m. Colliers International has been instructed to sell the freehold investment in the Charlecote Pheasant Hotel, near Stratford-upon-Avon. The property, which is located in the village of Charlecote, is leased to Shearings Hotels on a 22-year unexpired lease at an annual passing rent of £350,000. The commercial property agent has been instructed by a private investment client. Offers are being sought in the region of £3.9m, reflecting a net initial yield of 8.45%.

Marco Pierre White rebrands Hoylake restaurant: Chef Marco Pierre White has relaunched his restaurant in Hoylake. Marco’s New York Italian is located at Holiday Inn in The Kings Gap and will be officially launched on Monday, June 17. The restaurant was originally known as Frankie’s, a joint venture between Marco and champion jockey, Frankie Dettori. The re-brand follows a year of work alongside a team of experts to evolve the New York Italian concept. The new venture sees Marco partner with Sanguine Hospitality, a hotel and restaurant development company, who he already works with on his Steakhouse Bar & Grill chain.

Sixth Giggling Squid opening set for July: The sixth Giggling Squid, a 98-seater Thai restaurant, is to open in Reigate in early July. The latest opening follows sites in Brighton, Hove and Crawley in Sussex, Tunbridge Wells in Kent and Henley in Oxfordshire. Giggling Squid, which opened its first restaurant in 2009 in Hove, has established a strong reputation for its authentic, rustic and fresh Thai cooking with the emphasis on street food and coastal specialities. Giggling Squid owners, husband-and-wife team Andrew and Pranee Laurillard have invested £350,000 in the site of the former Puccino Café on Reigate High Street, having first viewed the location three years ago. But the project was first beset with planning delays, then with complications of modernising a four-storey listed building, then the discovery of a 60 cubic metre tunnel beneath the 250 year old building. 

Hop Stuff Brewery looks to raise £50,000 through Crowdcube: Hop Stuff Brewery, a new brewery planned for Woolwich, is looking to raise £50,000 for 30% of its equity through crowd-funding website Crowdcube. Founder Simon Yeomans said: “Hop Stuff Brewery offers an opportunity for investors to join a business at the start of something we believe could be special. Local ales are increasingly becoming important for pubs and bars as people push back against the mass-produced, force carbonated, pasteurised and flavourless beers.” A total of 13 investors have pledged £8,450 so far.

Adam Marshall ‘Grand Union deal with Luke Johnson followed on from Propel Conference’: Grand Union founder Adam Marshall has revealed that it was hearing investor Luke Johnson speak at the Propel Multi Club Conference in March that made him decide he was would be a great investor to take his London-based Grand Union business forward. The investment by Johnson, in a personal capacity, saw him acquire the 50% stake of Grand Union co-founder Adam Saword. The investment was completed in a few short weeks after Marshall contacted Johnson in the wake of the conference. Marshall told Propel: “The Propel conference was an important factor. I liked the way Luke talked - he wasn’t full of bluff. He is pretty direct and realistic about the industry. I thought, ‘This is exactly the sort of person I want to work with’. I’ve spoken with private equity firms and banks in the past but there isn’t anyone better placed or a better operator in terms of growing brands and businesses. He gives us credibility as well – he believes in our brand and the opportunity. He’s also ‘positively challenging’, which is, essentially, the way I run the business.” Marshall said that Grand Union hopes to open ten new sites in the next three year to add to the existing seven – there is a target of three or four new sites in the first year. The company was already looking at three sites prior to the Johnson investment. “It looks like two of those might happen – one free-of-tie site and one tied site.” The company will look at sites that range from 3,000 square foot with a large external area up to 7,000 square foot. Grand Union already operates in a range of locations, from a business district like Paddington through to south London sites. “Half of the estate going forward will be free-of-tie but some of out tied pubs make up to £500,000 site profit – our Brixton and Wandsworth venues are great sites.” Marshall said that it would be 18 months before the company begins to look at sites outside of London. Current like-for-likes at Grand Union are seven% up. “March was a tough month but we’re looking forward to a good summer,” he added. (The next Propel Multi Club Conference takes place this Thursday (20 June) at Oxford Belfry. A late addition to the speaker programme in Wetherspoon founder Tim Martin who will talking to Propel managing director Paul Charity about the company’s growth pinch-points and the myths that have grown up around the company.)

Prezzo launches better burger, ribs and chicken brand: Prezzo, the operator of 200 restaurants led by Jonathan Kaye, has launched a new brand in Cobham, Surrey. The brand, Cleaver, focuses on American classics. The menu offers five variants on chicken, burgers and ribs, with an open kitchen showcasing chefs cooking on charcoal and a rotisserie chicken operation. Design is a radical departure for Prezzo with the entire restaurant clad externally with wooden boarding. Inside, the Mid-Western wood shack theme is continued with extensive use of seemingly reclaimed material, most notably different types of distressed and less distressed wood but also corrugated iron and concrete. The wood on the ceiling looks like reclaimed bowling alley floor. A large floor-to-ceiling menu board is the actual wall in the foyer to make a firm statement – we do a limited but high quality menu that is unchanging. The menu is stripped back to focus on around 15 variants of better burger, better chicken or better ribs. Chicken – the menu states that it is bought from ‘selected Norfolk farms’ - is served whole (£13.95), half (£8.95) or quarter (£5.50). A bowl of wings is £4.95 for five or £9.95 for ten. There are three burger options, hand made from prime Scottish beef: Classic or with cheese (£7.75), cheese and bacon (£8.95) or cheese and jalapeno (£8.75). Ribs, (‘fully traceable locally sourced pork’) are served in four variants: A full rack is £12.95, a half rack is £6.95 and there is a half rack and wings option (£11.45) and a half rack and quarter chicken (£11.95). All sides are extra and priced at £2.95: Skin on fries, sweet potato fries, onion rings, corn on the cob, slaw, green salad, wedge salad, fried courgettes. A couple of stand-alone fridges in the dining area showcase the brand’s two craft beer choices – Camden pale ale (£4.25) and Camden Hells Lager (£3.95). There are just nine wine choices, categorised as ‘good, better and best’ on the menu across white, red and rose. Desserts feature US classics such as New York vanilla cheesecake (£4.95) and waffle topped with vanilla ice cream and maple syrup (£3.95), with an on-site doughnut machine producing mini-doughnuts served with chocolate dipping sauce (£3.95). There’s a choice of three milkshakes – chocolate, banana and vanilla (£3.95). Propel managing director Paul Charity said: “Cleaver redefines the better burger category by stripping it down to three classics and adding what might be called better chicken and better ribs. This is possibly the first time a potentially mainstream brand has been brave enough to offer a menu as simple as this, relying on supreme quality of each item to carry the day. The design is little short of stunning – quite unlike anything else in the market. It avoids the cliché traps in referencing the US Mid-West and, instead, feels homely and authentic, like you have stepped into a friend’s shabby chic log cabin for a barbecue. Cleaver uses a charcoal grill as its major cooking method - and there is a large showy pile of bags of charcoal next to the cooking station to emphasise the point. The brand sits on a suburban street in Cobham but would clearly work in a wide variety of retail and leisure parks.” Prezzo currently runs the eponymous Italian food brand and Mexican brand Chimichanga. 

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