Yum! Europe paid circa £3.7m to acquire Pizza Hut UK dine-in operations, UK franchisee suffered from effects of declining trade, rising costs and loan repayments and owed £9.9m to HMRC: Yum! Europe paid circa £3.7m to acquire Pizza Hut’s UK dine-in operations, an administrator report into the sale of DC London Pie has revealed. FTI was appointed as the administrator on 20 October of DC London Pie, the company formed a year ago to run Pizza Hut UK by US firm Directional Capital following the collapse of former franchisee Heart With Smart. Immediately following the appointment of FTI, the administrators completed a deal which saw 79 restaurants close and 64 safeguarded, with approximately 1,254 team members transferred to Yum! A notice of administrators’ proposals shows that Yum! Europe paid circa £3.7m for a deal which included 36 leasehold premises, while a separate agreement was reached with Heart With Smart for a further 28 premises where the leases had not yet been assigned to DC London Pie. Ordinary preferential creditor claims are estimated at £0.3m and are expected to be paid in full from net floating charge realisations. Secondary preferential claims, relating to unpaid VAT and PAYE, are estimated at £11m and FTI expect returns to be less than 10%. Unsecured Creditors are estimated at £6.1m and are expected to get no distribution. Accounts for the period from the acquisition on 16 January 2025 to 7 September shows DC London Pie had net sales of £81,346,000, labour costs of £27,550,000, sales costs of £16,199,000, a gross profit of £37,597,000, overheads of £38,808,000, negative trading Ebitda of £711,000, £2,980,000 in other expenses, negative adjusted net Ebitda of £3,691,000, exceptionals of £6,884,000 and negative net Ebitda post-exceptionals of £10,574,000. The DC Group is owned by Dwayne Boothe and Corey Printup and also operates Pizza Hut delivery franchises in the UK, Denmark and Sweden. As part of the original acquisition from Heart With Smart, it was loaned £18.2m by parent company Yum III (UK), a subsidiary of Yum! A report into events leading up to last month’s administration shows that DC London Pie suffered from the effects of declining trade, rising costs and loan repayments and owed £9.9m to HMRC. It said: “post-acquisition, management initiated a turnaround strategy which included headcount rationalisation (including the prior executive management team), the closure of certain underperforming sites and optimisation of in-store staffing levels. Whilst these measures sought to reduce run-rate overheads, the company incurred exceptional restructuring costs and experienced significant working capital pressures. We understand that the company also provided funding support to wider parts of the DC Group. The company experienced significant cash constraints driven by the following. Declining trading performance: Negative like-for-like sales performance driven by intensified competition from quick-service restaurant operators and delivery aggregators. Rising cost base: Increased cost pressure from food inflation and labour cost increases following changes to the national wage effective from April 2025, which had not been passed on in full to the consumer. Intercompany outflows: From January 2025 to September 2025, the company recorded net intercompany outflows of c.£4.8m. Through discussions with management, we understand these funds were used to provide working capital support (principally payroll) to other DC Group entities. Loan repayments: Over the same period, the company repaid c.£4.9m to an accounts receivable funding line. We understand from management that the facility was drawn by a US-based DC Group entity, and it is currently unclear if the original funds from the accounts receivable funding line were received by the company. Consequently, the company became unable to fulfil several of its obligations as they fell due, including: Tax liabilities: Significant arrears that accrued in relation to VAT and other taxes, leading to enforcement action initiated by HMRC. Trade creditors: were not being paid to terms, prompting several suppliers to restrict deliveries, renegotiate terms, or threaten legal proceedings. This includes the company's largest supplier, which removed payment terms, requiring daily payments on account, and a minimum-security deposit. Utilities: The company had arrears with utility providers, including a key water supplier threatening disconnection and legal action, alongside substantial energy arrears; Royalty payments: The company had not paid royalty amounts due to the franchisor, resulting in arrears to Yum!, in addition to their secured debt. HMRC issued a winding up petition against the company on 11 September 2025 for unpaid debts amounting to c.£9.9m.” FTI said it had contacted the sole under bidder under the extensive sales process from last year, when Heart With Smart had entered administration, to see if a further bid could be put forward this time. But that party “confirmed significant funding, financial and other concessions would be required from Yum! For them to consider bidding”, which Yum! said it was not supportive of. The report added: “The option to continue trading the business in administration whilst we pursued a post-appointment sale of the business and assets was disregarded for the following reasons: The previous and extensive sales process performed for HWS had demonstrated there was limited interest in the business and assets. Since acquiring the business, its financial performance had deteriorated, and its cash position had become more constrained, making any offer for the business and/or business and assets less likely. Trading in insolvency was seen by the franchisor as brand damaging. Trading in administration would have required material funding to allow for the continuation of operations. Trading the company in administration without a transaction was likely to have led to significant value deterioration in the business, through trading disruptions, creditor ransom demands and loss of staff. The company was also loss making and the cost of a trading administration would have resulted in further trading losses. This would have been value-destructive and would likely have led to a lower value being achieved than is provided by the transaction.”

Premium Club subscribers to receive new searchable and segmented New Openings Database on Friday: The next Propel New Openings Database will be sent to Premium Club subscribers on Friday (7 November), at 12pm. The database will show the details of 213 site openings, including which company has opened a site or its plans to open one in the future. The database will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis and Premium Club subscribers will also receive a 14,673-word report on the 213 new additions to the database. It is segmented into seven categories – cafe bakery, casual dining, experiential leisure, fine dining, hotels, pubs and bars, and quick service restaurants – making it even easier for users to search. The database includes new openings in the pubs and bars sector such as The Gropers Arms, which has been opened in Devon by Paul and Debbie Turner at their holiday cottage business Compton Pool Holiday Cottages; Arc Inspirations launching Box Piccadilly in London’s Shaftesbury Avenue; and Exale Brewing opening The Black Eel in Dalston in the capital. Premium Club subscribers also receive access to five other databases: the Turnover & Profits Blue Book, the Multi-Site Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Hospitality. All Premium Club subscribers will be offered a 20% discount on tickets to Propel paid-for events and discounts on specialist sector reports. Operators that are Premium Club subscribers are also able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club subscribers receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club subscribers also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or supplier. Email kai.kirkman@propelinfo.com today to sign up.

The Cook’s Tale owner opens new Canterbury restaurant: Dev Biswal, chef-owner of the Anglo-Indian restaurant The Cook’s Tale in Canterbury, has opened a new restaurant in the Kent city. Biswal, who rebranded his Ambretta restaurant to The Cook’s Tale in 2022, has opened Café Marrakech at 13 Rosemary Lane. The new restaurant is “a curated mixture of Moroccan elegance, authentic flavours and traditional hospitality, with slow-cooked tagines, charcoal-grilled meats, hand-rolled couscous, vibrant salads, flaky pastries, freshly baked khobz and sweet delights like semolina basbousa”. Biswal said he became inspired by north African cuisines after recruiting a Moroccan chef at The Cook’s Tale. He quickly added it to the destinations of his small group culinary tours operation, The Cooks Adventures. He said: “Visiting Morocco for the first time was a real eye-opener – I was amazed by the similarities in Moroccan and Indian cuisines; our food and cultures have more in common than I could have possibly imagined. I grew up thinking samosas were an Indian invention! The parathas, koftas, naans and sharbat and curries Biswal ate in in local restaurants as a child – all have their equivalent in Morrocco.” Closer to home, Biswal also runs Canterbury Experiences, which offers tailored ‘culinary pilgrimages’ in the city.