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Fri 14th Dec 2018 - Propel Friday News Briefing

Story of the Day:

Chilango boss – success of bond offer shows we’ve come of age, like-for-likes at 10%, on hunt for marketing director: Eric Partaker, co-founder of Mexican brand Chilango, has told Propel the success of its Burrito Bond 2 offer shows the company has “come of age”. Partaker also revealed Chilango had seen like-for-like sales increase to 10% in its current quarter while the business, which operates 11 sites, would focus its expansion plans on London. The Burrito Bond 2 offer, which has now been extended into 2019, has so far raised almost £2.5m – exceeding the £2.1m the company raised in 2014 from more than 700 investors through its inaugural mini-bond offer on crowdfunding platform Crowdcube. The Burrito Bond 2 is offering 8% interest annually over four years, with bondholders offered the opportunity to redeem their bond in full at maturity. The minimum investment is £500, although more than 100 people have invested £10,000 or more to get their hands on a Chilango Black Card, which entitles the holder to one free meal a week for the duration of their bond. Investors this time around include former Itsu managing director David Haimes, ex-Domino’s Pizza chief executive Chris Moore and former McDonald’s UK marketing vice-president Laurie Morgan. Partaker said: “I am thrilled with how the bond has performed. Firstly, it gives us the finances we need to refinance some of our existing debt and open new sites and, secondly, I think it shows how we’ve come of age. Before we had to partner with a platform to get over the line in terms of our target. This time round we’ve built our own crowdfunding platform, raised the funds on our own and beaten the previous figure, which shows how the brand has reached a new level.” Partaker said the goal was to open three sites next year from the funds raised and, while the company will open its second regional site, in Birmingham in 2019, expansion would focus on London for at least the next 12 to 18 months. “The performance of our regional site, in Manchester, makes us excited about Birmingham, but after that it’s all about London,” Partaker said. “I look at how well brands such as Itsu have done, and that’s the benchmark for us. We have three aspects of the business we believe give us a significant competitive advantage – our relentless focus on the product, how passionate we are about the brand and making sure we cut out any misalignments, and our obsession with data. Our data warehouse and business intelligence tools allow our managers to drill down in real time into opportunities. You don’t go to all this trouble to build a brand that has just 20 or 30 sites. While it’s all about Birmingham and London for now, we have big ambitions.” Partaker said the company was on track to increase turnover from £10.3m to £10.9m in its current financial year, even though no new sites have opened. Restaurant Ebitda is expected to top £2m. He added: “Our focus this year has been on the bond offer and improving our core business. Now we have the funds we can start expanding again and also grow the team as we’re on the hunt for a marketing director. We’re having a great year – like-for-likes are at 10% in the current quarter and we’re not experiencing the downturn some businesses are. Delivery is massive for us and we’ve really embraced it – it now makes up about 20% of our sales.”

Industry News:

John Upton to feature in next video for Premium subscribers: John Upton, former managing director of Leon, member of the McDonald’s UK leadership team and now board member of Motherclucker and Naked Deli, will feature in the next 30-minute video for Propel Premium subscribers, which will be sent out on Friday (14 December). Upton offers his key insights on scale planning, operational teams, improving sales growth and cost efficiency, and change management in growth companies. Premium subscribers receive regular video recordings of key speakers from Propel events and conferences. They have included sector investor Luke Johnson, Ceviche founder Martin Morales, City Pub Company founder Clive Watson, brand strategist Ian Dunstall, Chozen Noodle chief executive Matthew Kirby, Coaching Inn Group founder Kevin Charity, consultant James Hacon, Imbiba partner Darrel Connell, Sticks ‘n’ Sushi group chief operating officer Andreas Karlsson, Mowgli founder Nisha Katona, haysmacintyre partner Andrew Ball, Carluccio’s chief executive Mark Jones, Swingers co-founder Matt Grech-Smith and Morar HPI deputy managing director Martin Dinkele. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, access to our database of 1,300 multi-site companies, and discounts to attend Propel conferences and events. Propel managing director Paul Charity said: “We plan to compile an invaluable library of senior leaders and advisors offering insights and advice, a resource Premium readers can tap into.” An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Ian Payne receives MBE: Stonegate Pub Company chairman Ian Payne has received his MBE. Payne was presented with his award by the Prince of Wales, who thanked him for his work in keeping British pubs open. Payne, in turn, thanked Prince Charles for supporting Pub Is The Hub and the work he carries out with chief executive John Longden, who is an OBE himself. Payne said: “It was an amazing experience – long live the Great British pub.”

Best Bar None reveals award finalists: Best Bar None, the Home Office-supported community safety programme operated by pubs and bars in the UK, has revealed the finalists for this year’s Best Bar None Awards. Conwy, Sheffield, Plymouth and Tower Hamlets are all in the running to win best overall scheme, with £3,000 going to the winner. Conwy, Sheffield and Wrexham have been shortlisted for most innovative scheme, while best new scheme sees Torbay and Barnsley go head to head. Both these categories carry a prize fund of £1,000. Judging takes place in January and the winners will be announced on Monday, 4 February at a reception at the House of Lords. Best Bar None national co-ordinator Mick McDonnell said: “It is fantastic to read about the different initiatives the schemes come up with to improve community safety and encourage widespread participation in their areas.” Best Bar None has been running for more than 15 years and there are 49 active schemes encompassing hundreds of licensed premises in more than 70 towns and cities in England and Wales.

Company News:

Shepherd Neame unveils debut partnership as micro-brewer opens first pub: Kent-based brewer and retailer Shepherd Neame has unveiled its first partnership, which has seen micro-brewer Rockin Robin launch its debut pub. Rockin Robin Brewery has renamed Shepherd Neame-owned pub The Duke of Edinburgh in Barming, near Maidstone, as Rockin Robin On The Green. Shepherd Neame director of retail and tenanted operations Nigel Bunting said: “We will be supplying lager, wine, spirits and minerals, while the majority of cask beer will be supplied by Rockin Robin. It is the first time we have undertaken this type of collaboration but we are excited to be working with an award-winning local micro-brewery on this project.” Robin Smallbone founded Rockin Robin Brewery in 2011 at his home in Loose, near Maidstone. He initially produced only three barrels a week but high demand led him to relocate in 2014 to a 15-barrel micro-brewery at a farm in nearby Boughton Monchelsea. Smallbone was prompted to approach Shepherd Neame about taking on a pub following the success of the Beer Barn, a function area it opened at its micro-brewery two years ago. In addition to installing six Rockin Robin beers on draught, Smallbone and partner Michelle Gordon have introduced a new food menu at the pub. Smallbone said: “When I started brewing I was inspired by companies such as Shepherd Neame and Harvey’s to make traditional beer rather than off-the-wall ‘craft beer’ so it is amazing to now work with them.”

Spuntino lands at Heathrow following TRG Concessions partnership: Restaurant entrepreneurs Russell Norman and Richard Beatty, the pair behind Polpo, have opened a second site for their Spuntino concept, at Heathrow airport. The launch, at Terminal 3, follows the signing of an exclusive franchise agreement with The Restaurant Group (TRG) Concessions earlier this year. The New York comfort food-inspired eatery has developed bespoke airport breakfast and takeaway menus. There is also a selection of craft beer, wine and spirits alongside the brand’s signature cocktails. Key features of the new Spuntino, which means “snack” in Italian, include a doughnut machine, roller-skating hosts and a mural by Soho artist Neal Fox. Beatty said: “We are delighted to bring our cult restaurant to Heathrow. Expect hearty breakfasts, legendary burgers, mac ‘n’ cheese and lots of doughnuts! We are also fortunate enough to be able to premiere Neal Fox’s site-specific mural, the first of its kind in an airport restaurant.” TRG Concessions managing director Nick Ayerst added: “Working with Russell and Richard on this project has been a fantastic experience. The passengers at Heathrow Terminal 3 are in for something completely different. Spuntino is authentic and offers the terminal a magnetic point of difference.” Spuntino’s debut site is in Rupert Street, Soho, and features 27 stools and a popcorn machine.

Starbucks franchisee 23.5 Degrees opens 60th outlet six months after 50th, new Sheffield site features first apprentice: Starbucks’ first UK franchised business partner 23.5 Degrees has opened its 60th outlet – only six months after the launch of its 50th. The site at Drakehouse Retail Park in Sheffield is the first Starbucks drive-thru in the city. The venue has created 20 jobs, including 23.5 Degrees’ first apprentice. Managing director Mark Hepburn said: “Reaching our 60th Starbucks store just six months after opening our 50th demonstrates our commitment to ambitious growth. We’re keen to keep our foot on the gas and hope to extend our store count considerably in the coming years.” 23.5 Degrees opened its first store in Liphook, Hampshire, in February 2013. The business plans to open a further six Starbucks stores in the next three months, with 23 stores planned for 2019. 23.5 Degrees has opened 13 drive-thrus this year and is seeking further opportunities on main roads close to major retail destinations or on large industrial estates. These should have the capability to be designed into three standard-sized units of 1,500, 1,800 and 2,200 square feet. 23.5 Degrees will also consider retail park and drive-to destinations as well as high-street units with a minimum of 1,500 square feet. Following an initial £5.6m growth capital investment in 2015, Connection Capital invested a further £3.6m into 23.5 Degrees in the summer. Meanwhile, Starbucks has opened a Reserve Roastery in New York. Located in the meatpacking district, the 23,000 square foot site is Starbucks’ fourth Reserve Roastery and second in the US. 

Bermondsey-based brewer extends £400,000 crowdfunding campaign to triple production: Bermondsey-based brewer Anspach & Hobday has extended its £400,000 fund-raise on crowdfunding platform Crowdcube. The company is offering 11.76% equity in return for the investment, giving a pre-money valuation of £3m. So far, 266 investors have pledged £235,450. The campaign was due to end on Sunday (16 December) but with the extension there are now 28 days remaining. The company plans to use the funds to triple production and expand taproom space. Anspach & Hobday wrote: “It is a vote of confidence from Crowdcube. Entirely at its discretion it has given us longer and I take that as an indication it fully expects us to succeed. The extension is of good length and this is predominantly to address concerns voiced by many that they are keen for the investment transaction not to overlap with Christmas. This now means we expect the fund-raising to be finished on 10 January.” Anspach & Hobday exports its beer to 11 countries and plans to increase production to meet 50% year-on-year wholesale growth and expand the range of brews at its Bermondsey taproom. The company reported 50% year-on-year wholesale growth (from £195,000 in 2017 to £294,000 in 2018; overall Ebitda minus £50,900). Founded in 2012 by Paul Anspach and Jack Hobday, the brewery produces keg, cask and bottled beer and is “moving on to cans”.

London Cooking Project team to launch Tuscan coastal concept in Brixton: The team behind Battersea-based private social enterprise the London Cooking Project is to launch a Tuscan coastal concept in Brixton. Maremma will open at former pub the Montego Inn in Brixton Water Lane in February. The neighbourhood restaurant will take inspiration from the Maremma coastal region in southern Tuscany, which is known for its game, high-quality seasonal produce and seafood. The menu will focus on regional specialities, with pasta made daily and meat and fish cooked on a charcoal grill. Wine, cheese and olive oil will be imported directly from specially selected Tuscan suppliers. The venue will feature a quartz-topped bar, where customers can watch the chefs in action or banquettes with oak tables. Stairs will lead to a wine cellar and private dining room. The Maremma team consists of Dominique Goltinger, former head chef of Bistrot Bruno Loubet, private chef Alice Staple and Dickie Bielenberg, who said: “I have always dreamed of bringing a bit of Maremma to Brixton. Alice and I love this region and were won over by its fine produce, fine wine and charm. We have met some wonderful people there and some of them will become our suppliers.” Staple added: “We have sourced the very best produce and lesser-known wine. I can’t wait to showcase these in our little slice of the Maremma in Brixton.” The London Cooking Project runs a variety of events, supper clubs, pop-ups and cookery classes. Funds from these activities, along with kitchen hire and venue hire for film and photo shoots, is injected back into community and charity food-based projects.

Angela Malik joins Think Hospitality as strategy director: Industry consultant Angela Malik has joined Think Hospitality as strategy director. She will help hospitality companies develop strategies and facilitate major change programmes, helping them to realise their aspirations in the sector. As well as being MBA qualified and a chartered accountant, Malik has more than 20 years’ experience in the hospitality sector. She is an advisor and board member on Sadiq Khan’s London Food Board and is a well-known personality in the industry due to her role as a founding panellist on BBC Radio 4 show The Kitchen Cabinet and numerous appearances on television and in national newspapers. 

No1 Lounges opens 11th site, offering Gatwick’s first outside terrace: No1 Lounges, which operates pay-on-entry lounges at airports across the UK, has opened its 11th site, at Gatwick’s South Terminal. The venue has opened under the company’s My Lounge brand and is the first at Gatwick to feature an outside terrace. No1 now operates six sites at Gatwick across three brands – My Lounge (premium economy and leisure), No1 Lounges (business class) and Clubrooms (first class). The new lounge is a partnership with Norwegian Airlines. No1’s other UK lounges are at Heathrow, Edinburgh and Birmingham airports. In total, the company will host 1.5 million passengers in its lounges this year. No1 Lounges founder and chief executive Phil Cameron said: “Our lounges have proved extremely popular with business and leisure travellers so this opening ensures we can offer the greatest choice of experiences to meet ever-increasing demand.” Gatwick chief commercial officer Guy Stephenson added: “This lounge offers a comfortable and affordable pre-flight experience and the outdoor seating terrace – the first of its kind at Gatwick – is a particularly welcome addition.”

Berkshire-based Papa John’s franchisees open third site: Berkshire-based Papa John’s franchisees Gurminder and Tina Bains have opened their third site in the county. The store has opened in Bracknell to join the Bains’ other sites in Wokingham and Reading. About 20 staff have been recruited for the site in Market Street, which is near the town’s train station. Gurminder Bains said: “I joined Papa John’s as a franchisee eight years ago. Tina and I were keen to build a joint business together for the future, within a growing industry. Over the years our success has meant we have also been able to put something back. Once a week we supply free food to the homeless. In a typical evening we can give pizza out to 130 people. A number of staff join us as regular volunteers.” Papa John’s has more than 350 sites across the UK and over 5,000 stores in more than 40 international markets and territories.

Soho Coffee Co returns to Bristol’s Cabot Circus: Artisan coffee chain Soho Coffee Co has returned to Cabot Circus shopping centre in Bristol for its fourth and final launch of 2018. The new venue in Brigstowe Street showcases the latest Soho Coffee Co branding alongside new design features. The menu includes Soho spuds, brioche rolls and organic soup. The new store heralds a return to Cabot Circus for the brand after it closed its Central Space store four months ago. The venue represents Soho Coffee Co’s second Bristol opening in as many months following the launch of a venue in Queen’s Road in the Clifton Triangle. Soho Coffee Co was founded in Cheltenham in 1999 and now operates 40 stores, with its heartland in the south west. Managing director Penny Manuel said: “The team is thrilled to be back. We were never going to be away for long. We love Bristol and it was always our intention to open a new store in Cabot Circus. Bristol and the south west are the home of Soho Coffee Co – and where our heart lies.”

Graffiti Spirits trials no-phone policy at Liverpool bar: Graffiti Spirits, the Liverpool-based independent bar and restaurant group owned by Matt Farrell and John Ennis, is trialling a no-phone policy at its 81 site. On Thursdays and Sundays guests at the “by appointment only” prohibition bar in Seel Street have to hand their devices to a bartender, who will store it in a box. Farrell said: “Mobile phones infiltrating our social spaces has turned into an epidemic but people are also starting to become aware of it and are taking steps to claim their time back. Discouraging mobile phone usage altogether felt like a natural progression and in line with 81’s ethos. Of course, social media is a useful tool for marketing and can be great when used in moderation. However, it’s beneficial to step away, escape and unwind every now and again. Nothing beats face-to-face conversation, eye contact and a great cocktail.”

Nando’s secures former Pizza Hut site at Manchester retail park: Nando’s has signed a deal to open a site at White City Retail Park in Manchester. The company has agreed a 20-year lease with complex owner The Derwent Group. Nando’s has taken a 3,461 square foot unit, which was previously home to Pizza Hut, and expects to open its restaurant in July. The Derwent Group senior asset manager James Maule-Ffinch told The Business Desk: “Nando’s is a very popular brand and its addition helps to strengthen the food and beverage offer at White City Retail Park. The retail park features 210,570 square feet of retail space and 658 parking spaces having undergone a £10m refurbishment in 2016 to create an additional 56,000 square feet. Cheetham & Mortimer and CSP are joint agents for White City Retail Park.

The Sushi Maki doubles up with Basingstoke launch: The Sushi Maki has opened a second site, this time at Festival Place shopping centre in Basingstoke, Hampshire. The 48-cover venue has launched at a site formerly occupied by hot drinks retailer Whittard of Chelsea. The Sushi Maki’s debut site is in Newbury, Berkshire, which caters for 24 people and has been open for three years. Restaurant manager Maria Frade said: “We are all about fresh and flavoursome Japanese food – sushi is at the heart of what we do. We have a wide range of dishes designed and created by our chefs. We take great pride in the food and service we provide. Newbury and Basingstoke are both fairly small restaurants. The idea is to offer a cosy atmosphere where customers interact with each other and staff.”

Fairview Hotels acquires Cardiff Holiday Inn for £8.5m, seeks further venues across UK: Fairview Hotels has acquired the freehold of a Holiday Inn in Cardiff off an asking price of £8.5m. The Holiday Inn Cardiff – North is next to Junction 32 of the M4 and becomes Fairview’s 13th site. The 95-bedroom hotel, which underwent a significant refurbishment and reopened as a Holiday Inn in August 2014, also features a 100-cover restaurant, bar, lounge, five meeting rooms, an indoor swimming pool and 150 parking spaces. Fairview Hotels is the largest franchisee of Accor hotels in the UK, with the new venue marking the group’s first IHG brand franchise. Fairview director of hotels Neil Forbes said: “We are excited to join the IHG network and become a multi-brand operator. Fairview Hotels continues to actively seek further hotel acquisition opportunities across the UK.” Jeremy Jones, head of brokerage – hotels at Christie & Co, which handled the sale, said: “With interest from leading private UK operators and overseas investors, we were able to create a competitive bidding environment.”

Cineworld and Hollywood Bowl open sites at Intu Watford extension: Cineworld and Hollywood Bowl Group, the UK’s largest tenpin bowling operator, have opened sites at the new £180m extension at Intu Watford. Cineworld has opened a nine-screen complex featuring an IMAX with laser and 270-degree ScreenX. Meanwhile, Hollywood Bowl has invested £2.4m to launch its 23,600 square foot venue for its 59th site. The centre’s 400,000 square foot extension also includes 11 restaurants, a new-concept Debenhams and 13 retail stores. Intu regional manager Rebecca Ryman said: “Watford has a very affluent catchment area stretching into London and the home counties but hasn’t had the right leisure offer to attract families and other people living and working nearby into the town centre. We’ve created a new space at the heart of the town that is going to give operators there the perfect opportunity to flourish.”

Marston’s opens Wychwood Brewery taproom: Marston’s has opened a taproom at its Wychwood Brewery in Witney, Oxfordshire. Guests can try Wychwood beers such as Hobgoblin and Oxford Gold and learn about the brewery’s history. The taproom features modern seating areas while the brewery’s roots are celebrated throughout. A new bar has been added to allow for an increase in the number of brewery tours and to provide an events space. Hobgoblin brand manager Alex Harrison said: “We believe the taproom will be a great extension to the brewery, allowing customers to explore and taste our beer fresh from the barrels.”

Zonal makes changes to senior management team: Hospitality management solutions company Zonal has announced changes to its senior management team as it prepares for its next era of growth. Sales and marketing director Clive Consterdine is retiring after more than eight years with the company but will continue his close association with the firm as a consultant. To capitalise on recent growth and the strategic direction of the business, Zonal will create two director roles. Kara Purves will take on the new role of group marketing director in January. She has more than 19 years’ experience in senior marketing positions within the technology sector. Purves will focus on promoting the company’s marketing-led products and establishing a stronger group profile. Meanwhile, Tim Chapman has been promoted to sales director and will focus on developing emerging market opportunities. Zonal chief executive Stuart McLean said: “Clive has been instrumental in the success of Zonal since joining our board almost nine years ago. The Zonal team wishes Clive all the best in his new adventures and we look forward to continuing to work with him on special projects. We are delighted to welcome Kara to the team and see Tim step up in his new role. I’m confident our broader leadership team will help us drive the company to even greater heights as we reach our 40th anniversary in 2019.”

Showerings Cider Mill secures exclusive partnership with Glastonbury Festival for Mallets: Cider-maker Showerings Cider Mill, formerly known as Brothers Drinks Co, has secured an exclusive four-year partnership with Glastonbury Festival for premium cider brand Mallets. As the event’s principal cider brand, Mallets will be sold at 110 bars on draught and in 440ml cans during the festival. Showerings Cider Mill managing director Matthew Showering said: “We have been part of the festival for more than 20 years having introduced Brothers cider to Glastonbury in 1995, so the festival holds a special place in our hearts. We have worked extremely hard perfecting Mallets and this latest deal is testament to its quality.” Glastonbury Festival creator Michael Eavis added: “We feel it’s very important to have a local cider producer at the festival, showcasing some of the best cider Somerset has to offer. Mallets is produced just a stone’s throw from the festival and we’re looking forward to working with it.”

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