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Morning Briefing for pub, restaurant and food wervice operators

Thu 5th Jan 2023 - Propel Thursday News Briefing

Story of the Day:

Byron owner eyes pre-pack administration for better burger business: The backers of Byron are gearing up to put the better burger business through a pre-pack administration process, Propel understands. It is thought that Calveton UK, the backer of Byron’s parent company Famously Proper, has filed a notice of intention to appoint administrators to the 21-strong business and that there is a possibility that a pre-pack deal might be concluded within the coming week. Propel understands that Calveton co-founder Sandeep Vyas, who was formerly director of international operations at Yum! Brands, has recently set up a new company aimed at operating restaurants called Tristar Foods. A spokesperson for Famously Proper told Propel: “We’ve been working with our advisors at Interpath to explore options to secure new investment for the future of our business. We have recently filed court documents that will help us in progressing a transaction, which we’re confident we will be able to deliver and which will support the business in the long-term.” Propel reported in November that Famously Proper had appointed advisors at Interpath to help it review its options for the better burger business. Byron, which currently operates 21 restaurants across the UK, including five in London, was acquired via pre-pack administration by investment vehicle Calveton under newly formed company Famously Proper for circa £4m in summer 2020. It followed this with the acquisition of Mother Clucker, the London-based, buttermilk-fried chicken concept, last spring, for an undisclosed sum. Famously Proper, which is led by Gavin Cox, opened its first bricks and mortar site under the Mother Clucker brand in London’s Islington, in April. It is thought that Mother Clucker is not part of the current process. Calveton is backed by Vyas and Haseeb Aziz and was previously owned by Style Group Brands, which included the Jacques Vert brand. In July 2020, Byron closed 31 of its then 51 sites as part of the pre-pack administration process and sale to Calveton. Interpath declined to comment.

Industry News:

More than 400 booked for Restaurant Marketer & Innovator European Summit 2023: More than 400 delegates have now booked for this year’s Restaurant Marketer and Innovator two-day conference, taking place on 24 and 25 January at One Moorgate Place in London. More than 50 industry and agency leaders will take to the stage over two days representing brands including Burger King UK, Cornish Bakery, Gail’s Bakery, The Alchemist, Hawksmoor, Searcys, Press Up Hospitality Group, Vapiano, Popeyes UK, Inception Group, Oakman Group, New World Trading Company, Peggy Porschen Cakes, Krispy Kreme, KellyDeli, Red Engine, East Coast Concepts, Coco di Mama, The Cocktail Club, Tattu Restaurants, Hilton, Elior, MJMK, Lollipop, Chotto Matte, Ping Pong, Nobu, Gusto Italian, BrewDog, Kaleido, Darjeeling Express, Flat Earth Pizzas and Six by Nico. For the full speaker schedule for day one click here and for day two click here. Day one themes will be consumer and sector trends, start-ups, concepts and creativity and digital evolution, while day two focuses on purpose and responsible business, strategies for growth and communication and culture. Tickets for operators for the two days are £600 plus VAT and £350 plus VAT for one day. Tickets for suppliers are £950 plus VAT for the two days and £525 plus VAT for one day. Tickets can be purchased by contacting Jo Charity at Propel on

Coming this month for Premium subscribers – the Who’s Who of UK Food & Beverage: Propel is to add a fifth major database to its Premium service this month. The Who’s Who of UK Food and Beverage will be the first time full profiles of the UK’s top 700 food and beverage operators will be available in one place. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database has taken 16 months to pull together, merging Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Propel managing director Paul Charity said: “This invaluable guide simply hasn’t existed in the UK before. It’s a reference guide to the 700 largest operators in the UK. It will also be updated every month because on average 50 or so companies update each month of the year. So if you want to find out the most up-to-date information on a company, this is the database you will need on your desk at all times. It is also a wonderful complement to our Blue Book of Turnover and Profitability which is also updated each month and ranks these companies by turnover, profit and profit conversion. Together they provide the UK’s most detailed and insightful profile of absolute and relative performance.” Premium subscribers also receive access to three other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database and the UK Food and Beverage Franchisor Database. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Government to update on energy relief next week: The government will provide an update on the future of the energy relief scheme next week in the House of Commons after meeting with hospitality sector leaders. A spokesman for UKHospitality said: “It was a very positive and constructive meeting with the chancellor and we continued to stress the importance of the Energy Bill Relief Scheme (EBRS) being extended for hospitality businesses, in order to protect the businesses that need the most help. The EBRS has been critical in softening the blow of energy price increases and, without it, many businesses would have been jeopardised. It’s good to have confirmation from the Treasury that there will be an announcement on the future of the scheme next week and we await details in that announcement.” Jeremy Hunt, the UK chancellor, told business leaders in a meeting that the current level of energy support is “unsustainably expensive” and that the current £18bn scheme was always limited to six months. Any future support, while at a lower level, will be designed to avoid a cliff edge. Emma McClarkin, chief executive of the British Beer and Pub Association said: “We met with the chancellor today to underline the challenges the industry face and the critical importance of extending the energy relief support to avoid significant business failure and the closure of many pubs and brewers. Without extended support at close to current levels, pubs and brewers in communities across the country could be lost for good. Energy costs are the single biggest threat to our industry right now. The failure to safeguard pubs and breweries from price increases come April will be the last straw for businesses who have been struggling for three years to remain solvent and serving their communities. We urge the chancellor to extend the scheme or risk losing businesses across the UK that mean so much to so many.”

Company News:

Ponti’s owner and ex-Le Pain Quotidien MD plan to launch new coffee shop concept: Stefano Ispani, owner and operator of Ponti’s Restaurants, and Steven Whibley, former director at Gail’s and Le Pain Quotidien, plan to launch Caffe Italia, a “new generation of coffee shop” concept, in London, Propel has learned. It is understood that the pair under the Casa del Caffe umbrella are in talks to open the first site under the new concept in Westbourne Grove, Notting Hill. The new concept will look to combine “speciality coffee know-how, a delicious bakery menu, the best of Italian design and impeccable sustainability credentials”. The new business is understood to have an exclusive partnership with Lavazza for the venture. Ispani’s family have been running Italian cafes, restaurants and ice cream outlets for 60 years in London and remain Lavazza’s longest serving catering client. Whibley has held director roles at Gail’s and Le Pain Quotidien. He was managing director of Le Pain Quotidien UK at the turn of the decade, before returning to the after the brand was acquired through a pre-pack administration by a new vehicle BrunchCo, a subsidiary of Cobepa, the Belgian-based investment firm that was the chain’s existing backer, in June 2020. He stepped down as managing director of Le Pain in 2021.

Pret secures franchisee for Yorkshire: Pret A Manger, the JAB Holdings-backed chain, has further added to its franchisee base, after signing up with the Exultant Group to operate sites in Yorkshire, Propel has learned. Exultant is led by Mizan Syed and is currently a Pizza Hut Delivery franchisee. Propel understands that Pret divested its Sheffield Meadowhall site over to Exultant in December and the franchisee is opening a new site in Leeds (Woodhouse Lane) later this month. Exultant joins the likes of the Chesterford Group and Dallas Holdings as Pret franchisees in the UK.

Crosstown plans Bristol opening, commences CEO search: Crosstown, the artisan doughnut and speciality coffee concept, is to further add to its regional presence with an opening in Bristol, as it commences a search for a chief executive to oversee its next stage of growth, Propel has learned. The business, in which Foresight, the backer of Mowgli and Roxy Leisure, invested £3m last year, will open its fourth regional site in Queens Road, Clifton, next month. It follows an opening in Brighton in December, which added to sites in Cambridge and Oxford. At the same time, the 27-strong business, which was founded by JP Then and Adam Willis, will add to its London estate, with an opening in Shoreditch High Street overground station. It comes as Propel understands that the business has commenced the search for a chief executive to aid Willis and Then in the group’s next stage of its development. Willis said: “After an extremely challenging 2022, most of us will be looking forward to a better 2023. At the start of 2023 we said goodbye to our store at 35 Piccadilly due to the Crown Estate redeveloping the entire building. It has been an honour to have a store on one of the world’s most famous streets. As they say, one door shuts and another door opens. In the first two months of the year, we see two new Crosstown open. The first being a brand-new kiosk with TFL at the Shoreditch High Street overground station. The first time Crosstown ever got to pair our artisan coffee offer with our doughnuts was in 2014 when we did a six-month pop up at Piccadilly Tube Station. We can’t wait to greet the commuters in Shoreditch High St Station with a great hot drinks menu and London’s freshest sourdough doughnuts. This kiosk opens late January. Our second Crosstown of 2023 is our new store in Bristol at 21 Queens Road, Clifton, which will open late February. Bristol is such an exciting city to be bringing Crosstown to. There is a real vibrancy about the city and the Clifton area. The store is undergoing a total refit and it will have the full Crosstown offer of doughnuts in store and online 7 days a week, coffee, cookies and a scoop bar. We are under no illusions that 2023 is going to be a very tough year. But we are in the job of making life that little bit more enjoyable for people as we all face life’s challenges. We are here to give people a moment away from the madness that constantly surrounds us.”

Filipino concept Potato Corner makes UK debut: Potato Corner, the Filipino, kiosk-based flavoured fries concept, has made its debut in the UK, with an opening in central London. The company has opened its first UK site in the Medz Corner Food Court on Kensington High Street. Filipino businessman Wilfredo Ventura, the franchisee of the London store, said: “We are deeply honoured and privileged to launch this proudly Filipino brand to the UK and bring joy to our ‘kababayans’ who have been missing and craving for Potato Corner’s flavoured fries. The brand and its line of products have a global appeal. It can cater to UK locals who love potatoes, and what better way to enjoy potatoes than adding a variety of flavours. Our goal is to go global with our Potato Corner business.” Apart from London, Potato Corner has stores in the US, Panama, Thailand, Cambodia, Indonesia, Myanmar, Hong Kong, Saudi Arabia, Australia, China and Singapore – and recently made its debut in Canada. It has over 1,000 stores in the Philippines.

NQ64 begins building 2023 openings pipeline: NQ64, the immersive retro arcade bar concept backed by Imbiba, has begun building its 2023 openings pipeline, with two new sites set to open in the first half of the year. Propel understands that the nine-strong business, which made its debut in London, in Soho, last year, is in advanced talks on a second site in the capital, in Shoreditch. At the same time, it is understood to have lined up its first site in the south west, in Bristol. Founded in 2019 by Andy Haygarth and Matt Robson, the company received £2.5m in funding from ThinCats last August, in order to accelerate its openings pipeline. It is also targeting new locations in Leeds, Birmingham, Bath, Nottingham, Reading, Belfast, Sheffield, Aberdeen and Brighton, as well as further London sites. Haygarth told Propel that the company was happy with trading through December and the festive period. He said: “Unsurprisingly, sales were impacted the week of the train strikes, but this was offset by good trading in the week between Christmas and New Year.”

Immersive social experience concept Sandbox VR sets out UK expansion plans: Immersive social experience concept Sandbox VR, which made its debut in the UK earlier this summer, plans to open thirty venues here in the next six years. The company, which launched in Hong Kong in 2017, now operates 33 sites internationally, the majority in the US. It launched in London last July, in The Post Building in Museum Street, Holborn, and has been linked with an opening in the Grand Central shopping centre in Birmingham. It opened in the UK under a franchise deal with the Andy Scanlon-led VR Entertainment Group, which is looking to roll the concept out to other major UK cities following its London launch. It is thought openings in Manchester and Dublin are currently also under consideration. The site in central London became the first Sandbox VR venue in Europe and features the first “permanent robotic bartender” in the UK. Since opening in the summer, the venue has attracted more than 25,000 guests. Scanlon told The Times that the business planned to open thirty venues in the next six years, with two intended to open in 2023 and five in 2024. “I’ve come to the conclusion that the terrible consequences of covid have actually improved an offering like ours because it adds to the value of what we do,” he said. The change to working patterns prompted by the pandemic also has had an unexpected side-effect. Scanlon said the growth of hybrid working, with employees working from home at least some of the time, meant that managers saw team-building as more important than ever. Some corporate customers now visited his business “pretty much every month”.

SushiSamba says sales ‘encouraging’ since trading restrictions lifted: Samba London, trading as SushiSamba, which runs two restaurants and a number of bars from its two-floor complex on the 38th and 39th floors of the Heron Tower at 110 Bishopsgate, City of London, has reported that trading continued to be impacted during its year ended 31 December 2021, but that sales had been encouraging since trading restrictions were lifted. The company stated that its overriding KPI was Ebitda, which was revealed as a positive £1,308,000 compared to a negative figure of £1,009,000 in the year to December 2020. Revenue for the year was £15,603,721, up from £9,506,646 in the previous year, with a profit before tax of £375,849 (2020: loss of £1,934,586). By way of comparison, revenue for the last pre-pandemic year to December 2019 was £25,055,479. In a statement accompanying the accounts director Shimon Bokovza said: “Trading in early 2021 continued to be impacted due to the coronavirus restrictions with the premises closed for the first 102 days of the year. Since reopening both customer demand and sales were encouraging, reflecting a 15% increase in sales comparative to the same period in 2019 and pre-covid closures. Strong consumer demand and sales continued into 2022 with a 6% increase in sales in the first half of 2022; while it is not practicable to accurately predict the longer-term impact on consumer behaviour the directors expect the company’s underlying operations to continue to exceed pre-pandemic levels.”

TRG opens first Barburrito site: The Restaurant Group (TRG), the owner of Wagamama and Brunning & Price, has opened the first site under the Barburrito brand, since it acquired the business last July for £7m. The Andy Hornby-led company opened the site in Aberdeen’s Union Square just before the end of last year. Barburrito previously operated on the site in the town’s shopping centre, but closed two years ago as part of a wider restructure of the business. TRG acquired the 16-strong burrito bar chain, Barburrito, with an initial expansion plan to double the existing estate over the next four years. Last September, Hornby told Propel: “We’ve acquired a lovely little business with the right culture. We are looking at two or three potential provincial sites, at least one of which is in an airport. We are keen to get at least three or four new openings done next year.”

Mowgli sets out next four openings: Mowgli, the Indian street food concept, has set out the timetable for its next four openings, including its long-awaited launch in Bristol. The Nisha Katona-led, Foresight-backed group will open its next site in Brighton (Dukes Lane) on 24 February. It will be followed by an opening in Edinburgh (Hanover Street) in April. The group’s new sites in Bristol and Beverley (North Bar Within) will open later this summer. The Bristol site, on the former PizzaExpress in Corn Street was secured back in 2021. Katona said: “I will keep growing Mowgli while you still want her and I choose my cities according to your requests here on social media. By personally doing all Mowgli’s social media it means there is no distance between your voice and my hearing. This is the hope I have in keeping her relevant and ‘yours’ above all things.” Speaking last year, Katona said that the 15-strong business had identified a second London site, in Richmond, as well as locations in Bath and Knutsford. On whether she would consider taking her brand abroad, she said: “I would go overseas but I do think that we have a lot of runway in this country and I’m just starting to gently think about going to other countries. Maybe The Netherlands, Germany and the USA could be places that we could go. But right now, I have to find somewhere in Cambridge and Newcastle and I’ve got my plate full here, really.” Propel revealed at the end of 2021 that Mowgli had appointed advisors at PwC to help review its funding options for its next stage of growth.

Robert Prynn appointed Roadchef chairman: Robert Prynn, formerly chief financial officer of Moto, has been appointed the new chairman of motorway services operator Roadchef, Propel has learned. Prynn was chief financial officer of Moto during the period that it was owned by Macquarie Asset Management. Roadchef was acquired by Australian financial services group Macquarie last spring in a £900m deal. Prior to working at Moto, Prynn was finance director at SSP UK, Asia and International Development for over three years. He takes over the chairmanship of Roadchef from Simon Turl, the company’s former chief executive. Roadchef chief executive Mark Fox told Propel: “Simon is off to enjoy a well-deserved retirement following the successful sale of the company back in March 2022 and after 15 years of service at Roadchef.” Talking to Propel in October, Fox said that current sales across the 30-strong business remained well ahead of pre-covid levels, and it had seen a “subtle mix shift” between commuter and leisure traffic. Fox told Propel: “We saw a very strong rebound from covid as 2021 progressed and summer 2021 saw a number of trading records broken as the staycation effect remained strong. Trading has remained positive in 2022 albeit with some impact from Omicron in the first quarter but with further records broken during the peak of summer 2022 as the festivals returned in earnest, and currently sales remain well ahead of pre-covid levels. We’re seeing a subtle mix shift delivering slightly fewer commuters (homeworking) and a little more leisure traffic, which is a positive shift from our perspective.”

Former Hakkasan executive head chef Tong Chee Hwee to open Gouqi restaurant in London: Tong Chee Hwee, former executive head chef at international restaurant group Hakkasan, is to open his first solo restaurant, Gouqi, near London’s Trafalgar Square, Propel has learned. As revealed by Propel last March, Hwee, who left Hakkasan after 18 years in the summer of 2019, will open the new restaurant on the ex-Garfunkels site in Cockspur Street, Trafalgar Square, St James. At the time of his departure from Hakkasan, a spokesman for the company confirmed Hwee had moved on to “pursue other projects”. Hwee joined Hakkasan in 2001 at the request of co-founder Alan Yau and was appointed executive head chef of Hakkasan Hanway Place, which would go on to become the first Chinese restaurant in the UK to win a Michelin star, in 2003. He was later appointed executive head chef for all restaurants within the Hakkasan Group.

Hallsworth secures Parsons Green site for Freak Scene comeback: Former Nobu head chef Scott Hallsworth is to bring his pan-Asian concept Freak Scene back with an opening in London’s Parsons Green, Propel has learned. The concept previously operated as a pop-up in Farringdon, in 2017, before a permanent site opened the next year on the ex-Barrafina site in Frith Street, Soho. However, this site did not reopen post covid lockdown in April 2021. Now Freak Scene, which is inspired by Hallsworth’s experience in Japanese, Singaporean and Malay cooking, will open on the former Quadra site in Parsons Green Lane. Hallsworth, which also founded Japanese rock ‘n’ roll concept Kurobuta, has most recently been operating the Double Dragon pop-up in Clerkenwell. Marc Rogers of MKR Property acted on the Parsons Green deal.

Ottolenghi group returns to profit as revenues match pre-pandemic totals: Ottolenghi, founded by Yotam Ottolenghi in 2002 and now comprising four London delis, three restaurants and a catering branch rooted in Middle Eastern and Mediterranean traditions, more than doubled its revenue in the year ended 31 March 2022 and returned to profit after a year severely impacted by pandemic restrictions. Turnover for the year was £21,752,714 compared to £7,883,232 in the year to March 2021, with a pre-tax profit of £5,893,334 (2021: loss of £260,198). The company was in receipt of furlough grants totalling £422,428 (2021: £3,147,888). Revenue compared favourably to the figure of £20,845,457 recorded the last pre-pandemic year ended March 2020. In a statement accompanying the accounts, director Cornelia Staeubli said: “During the year ended 31 March 2022 the business continued to face many challenges. Due to trading restrictions imposed as a result of the covid -19 pandemic, three of our six sites were closed as we entered FY22 but we were relieved to be able to reopen on 17 May 2022. With the industry opening up, the recruitment and retention of staff became challenging as competition for candidates has been fierce, forcing us to rely more heavily on temporary staff at busy periods. Inflationary cost pressure also began to impact us towards the end of FY22 to which we now continually adapt through a combination of amending recipes, changing cooking techniques and, where necessary, increasing prices. But through these challenges we also managed to deliver successes. In May 2021 we moved our production unit and online store warehouse to larger, and more efficient premises in Holloway, North London. The additional space will enable us to sustain further deli expansion, as well as support the site kitchens and enhance quality control through central prep, while delivering operational efficiencies. We are now also able to produce for larger wholesale and catering clients. The larger warehouse will enable us to expand our online store product range and to supply increased demand. In July 2021 we opened a seventh site in London in Marylebone which is trading well. We closed our site on Motcomb Street in December 2021 to relocate nearby to a new, larger site on Pavilion Road in January 2022, of which we are very proud.”

Chotto Matte appoints Ben Hedley as global marketing director: Chotto Matte, the Nikkei cuisine concept founded by Kurt Zdesar, has appointed Ben Hedley, formerly of Burger & Lobster and The Fat Duck Group, as its new global marketing director. Hedley most recently worked on Neyba, the “multi-cuisine kitchen and grocer” concept with Burger & Lobster founder Misha Zelman. Previous to that he was director of marketing, global for Burger & Lobster for over three years. He also spent over two years overseeing sales and marketing at The Fat Duck Group. Last year, Chotto Matte opened its second site in London, in Marylebone. The four-strong business has openings lined up in Manchester, Doha, Riyadh, Nashville, Los Angeles and San Francisco, as it looks to expand to 20 sites in the next five years. It is also eyeing further expansion in Mexico, Panama, Italy and various US cities. Last April, it signed for a rooftop site in Manchester’s St Michael’s development, which is set to open in the summer of 2024.

Gong Cha launches in Portugal: Gong Cha, one of the world’s fastest-growing global tea brands, has made its debut in Portugal, with an opening in Lisbon. The company’s expansion into Portugal marks its third launch in a European market, following the UK, where it currently operates 11 sites, and Belgium. It has secured a master franchise agreement with Amélie Morisot, an experienced retail and marketing professional with over 17 years of experience at Coca Cola Europe, to expand into Portugal. The country’s first store opened last month in Lisbon’s central district of Chiado. Plans are in place to open two further stores in Porto in 2023. Founded in Taiwan in 1996, today the company has almost 1,800 locations across 20 countries including the UK, USA, Mexico, Australia, New Zealand, Korea and Japan. Paul Reynish, global chief executive of Gong Cha, said: “It is a pleasure to welcome Amélie and her team to the Gong Cha franchise community. She is a proven retail and marketing professional, with a wealth of experience and a strong track record in the beverage industry. Gong Cha’s launch in Portugal marks another significant milestone in our European expansion, and we can’t wait to bring the Gong Cha brand to Lisbon and Porto.”

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