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Morning Briefing for pub, restaurant and food wervice operators

Wed 3rd May 2023 - Update: Black Sheep Coffee, tipping legislation, Fluffy Fluffy Pancakes, Robert Parker Collection et al
Black Sheep Coffee set to enter Middle East market: Speciality coffee shop operator Black Sheep Coffee is set to enter the Middle East, with plans to open 250 sites across the region over the next 15 years. Propel understands that the business, which operates circa 65 sites in the UK, plus two in the Philippines and one in Paris, signed heads of terms on a 30-year franchise agreement in the Middle East that should see the opening of over 250 shops in the region in its initial 15-year term and a first opening in Dubai before the year end. The business is set to open its first two sites in the US, in Dallas, before the year end, including a two-lane drive-thru site. The company said: “The last 12 months were marked by several economic headwinds that came with their fair share of challenges as we faced a looming recession, the toughest UK strike actions of our century, the highest rates of inflation in the UK since 1981, driven by the highest energy prices ever facing our industry, a significant spike in commodity prices, with coffee and milk prices going up by 16% and 50%, respectively. But as you must know by now, it is often in turbulent times that we like to double down on growth and look for unique opportunities to take market share away from our competitors and to enter new markets. We increased our quarterly system sales by 89.7% from £4.36m in Q1 2022 to £8.27m in Q1 2023. We hit an all-time weekly system sales record of £724k versus £437k since our last update. We signed 39 new shop leases including two in the US. We built a pipeline of 70 new shops due to open in the next 12 months. We signed 21 new unit franchise agreements. We entered the airport’s market by opening at Heathrow, our nation’s busiest airport, and are set to open at Luton Airport. We have signed heads of terms for a 30-year franchise agreement in the Middle East that should see the opening of over 250 shops in the region and its initial 15-year term and a first opening in Dubai before the year end. We raised over £4.75m in equity. Most importantly perhaps we achieved a positive adjusted Ebitda at company level in Q1 and expect to deliver positive Ebitda in subsequent quarters. Trading has been resilient across the estate despite some unfortunate dips caused by strike actions that had a direct impact on our shops in tube/train stations and more generally on our London estate, which suffers most from people being unable to commute and forced to work from home. Although railway and other strike actions have been incredibly costly to our business, the impact on the company as a whole is increasingly mitigated by the fact that we are opening more and more shops in regional towns across the country that are less reliant on workers coming to the office and in a handful of cases even benefit from people working from home as a result of the strikes. Our same store sales (like-for-like sales) remain above industry average across channels, driven in part by regular price increases and also by the development of our range where we maintained a focus on our core products: ice drinks with the notable addition of bubble tea, and grab and go food with the notable addition of ready-made sandwiches and breakfast pots.” During the period, the business signed 21 unit franchise agreements and its franchise shop number significantly increased and now accounts for over 16.4% of its total system sales in Q1 2023 with total franchise revenue now standing at £583k.

Two days to go before the next edition of The New Openings Database release, to show details on 90 new sites, 4,000-word report included: The next edition of The New Openings Database will show the details of 90 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday (5 May), at midday, including which company has opened a site or its plans to open one in the future. It 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 the next edition features growing restaurant and bar, niche cuisine, and expanding experiential concepts. Premium subscribers will also receive a 4,000-word report on the new additions to the database. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Tipping legislation becomes law: More than two million workers will have their tips protected and be able to view an employer’s tipping record under new laws. The Employment (Allocation of Tips) Act 2023 has received Royal Assent and a new statutory code of practice will be developed to provide businesses and staff with advice on how tips should be distributed. Workers will also receive a new right to request more information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal. It is now unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned. The measures are expected to come into force in 2024, following a consultation and secondary legislation. Business and trade minister Kevin Hollinrake said: “As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees. Whether you are pulling pints or delivering a pizza, this new law will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.” UKHospitality chief executive Kate Nicholls added: “Fantastic hospitality experiences don’t happen without a huge effort from our teams, both front and back of house, and tips are a generous way of customers showing their gratitude, while providing a welcome boost to employees’ earnings. Tips are just one part of what makes working in hospitality a great job and career.”

Canadian franchise dessert brand Fluffy Fluffy Pancakes to kick off UK expansion plans with Leicester launch, plans five sites in Britain this year: Canadian franchise dessert brand Fluffy Fluffy Pancakes is kicking off its UK expansion with the opening of its second site. The company is launching the venue in Leicester as part of plans to open five sites in the UK this year. The site in Granby Street is expected to open this summer following a £250,000 investment. The brand, known for its light and fluffy Japanese souffle-style pancakes, opened its debut site in Manchester in October. Fluffy Fluffy, which is North America’s largest souffle pancake brand, made its debut in 2018, in Toronto, Canada. It now has 15 sites across North America, plus multiple sites in Europe. The new 1,100 square-foot, 22-seater, Leicester location will be home to Fluffy Fluffy’s signature open-kitchen concept where the brand’s pancakes are created before guests and stacked and topped with an array of flavours including Nutella and banana, Biscoff, and creme brûlée. The drinks menu features fruity fizzy soda, iced coffee and matcha specials. Hussein Umar, UK development lead at Fluffy Fluffy UK, said: “Leicester is a fantastic and diverse city and we’re excited to kick off our expansion journey there. Following impressive regeneration, it has seen excellent business growth, which made it a natural choice for us. We’re not even a year old in the UK yet but the time felt right to bring the brand to Leicester after such a strong start in Manchester. The Fluffy Fluffy concept is about spreading happiness through food and we can’t wait to introduce dessert lovers in Leicester to the sweet and special world of Fluffy Fluffy.”

Robert Parker Collection goes on the market: Robert Parker Collection, which owns four luxury hotels and spas in Northumberland and Scotland, has been put up for sale. Owners Robert and Gina Parker have decided to retire and sell Dalhousie Castle & Aqueous Spa in Edinburgh, Doxford Hall Hotel & Spa in Alnwick, Ednam House Hotel in Kelso and Eshott Hall in Morpeth. Dalhousie Castle & Aqueous Spa offers 35 bedrooms, a spa and two AA rosette dining in the Dungeon Restaurant. The 200-year-old mansion Doxford Hall Hotel & Spa, the only hotel in Northumberland to hold the four AA red stars, has 41 bedrooms, a spa, two AA rosette dining and Europe’s largest yew tree maze in the extensive grounds. Ednam House is a 33-bedroomed property situated on the banks of the River Tweed and includes a large ballroom. Eshott Hall has 11 bedrooms in the main hall and a further 13 bedrooms in adjacent buildings 38 acres of gardens and woodland, a tennis court, walled kitchen garden and a Victorian fernery. Robert Parker said, “It has been a real privilege to own the four hotels in the Robert Parker Collection, but retirement becomes an inevitability as ones reaches the grand old age of 80 years! We have been blessed throughout our ownership of them, with fabulous staff who have delivered a quality level of ‘environment’, ‘food’ and ‘service’ which is second to none. We owe them a great debt for all that they have contributed for so many years. I have no doubt that into the future we shall become regular paying guests.” Christie & Co is acting on the sale. Galbraith and Sanderson Young are also marketing Eshott Hall on the residential market.

Tomahawk Steakhouse opens in Morpeth: North east multi-site operator Howard Eggleston has opened a site in Morpeth, Northumberland, under his Tomahawk Steakhouse brand. The company has opened the 100-cover site in the town’s New Market, creating 25 jobs. It is the 13th Tomahawk Steakhouse site with further venues in the pipeline, Eggleston said: “I’m pleased to get Morpeth open, and the buzz in the local area for us coming has been fantastic with one of our Facebook posts being shared more than 3,000 times in less than 16 hours!” Eggleston is also expanding his Rio Brazilian concept with another four in the pipeline. As previously reported, Eggleston has closed his Tomahawk Steakhouse site in Chester, which is being rebranded to a Rio Brazilian and is due to open next month. Eggleston is aiming to have 15 Tomahawk Steakhouse sites – with Harrogate and Sunderland due to open – and ten Rio Brazilian venues – including sites in Sheffield and a third in Newcastle – by the end of the year

Marugame Udon strengthens delivery offer: International udon noodles and tempura restaurant brand Marugame Udon has strengthened its delivery offer by partnering with Just Eat and UberEats. Marugame Udon said the move allows it to reach a wider audience in London. Keith Bird, chief executive for Marugame Udon Europe said: “We are thrilled to partner with Just Eat and UberEats in addition to continuing our partnership with Deliveroo and bring our authentic udon dishes to customers’ doorsteps. Our mission has always been to introduce udon to all, and we are excited to expand our reach through this partnership.” Marugame Udon made its UK and European debut in London in 2021 with its flagship site off Liverpool Street, followed by nine openings, The O2, Canary Wharf, St Christopher’s Place, Brent Cross, Oxford Circus, Bromley, Waterloo, High Street Kensington, and The Strand. Marugame Udon has also just opened a new Reading restaurant, its eleventh in the UK, and first outside the capital.

Wendy’s closes Ilford site: Wendy’s, the third-largest quick service restaurant chain in the US, has closed its site in Ilford, east London. The restaurant in High Road has been boarded up and had its logo removed from above the premises. A Wendy’s spokesperson told Essex Live: “I can confirm we’ve closed the Wendy’s restaurant in Ilford. We appreciate the loyal customers and brand fans who have supported Wendy’s in the Ilford community.” Last month, Wendy’s opened sites in Lincoln and in Wisbech. This month it is opening its second drive-thru, which will launch at Northern Gateway, off Junction 28 of the A12 in Cuckoo Farm Way, Colchester. The openings take Wendy’s past 30 UK locations since returning to these shores in 2021 – including 13 brick-and-mortar restaurants – with the aim to have 45 sites by the end of this year.

Plant-based restaurant Holy Carrot secures debut permanent site: Plant-based restaurant Holy Carrot has secured its debut permanent site. The concept, which is the brainchild of former Vogue producer Irina Linovich, will open at 156 Portobello Road in London this autumn. The unit occupies 2,000 square foot over the ground floor and basement, and will deliver Holy Carrot’s signature dishes to a new customer base, including Holy Buffalo Wings and the Truffle Celeriac Risotto alongside new additions. It will build on Holy Carrot’s current pop-up restaurant in Knightsbridge. Linovich said: “We are delighted to be opening our flagship location in London as we expand our presence throughout the capital. Portobello Road is an iconic destination and one which is rich in creativity and difference, mirroring our unique offer seamlessly.” Shelley Sandzer acted for the leaseholder.

Domino’s Pizza acquires lease of Italian restaurant in Edinburgh: Domino’s Pizza is to open a new site in Edinburgh after acquiring the lease of Italian restaurant Fabio’s. The venue in Glasgow Road, which has space for 85 covers, closed at the end of March having been owned by Pietro and Fiona Crolla, and their son Pietro Junior for the past 23 years. Brian Sheldon, regional director of Christie & Co, who handled the sale, said: “Fabio’s is a long-standing, family-run business that benefits from a prominent trading location and many repeat customers. I’m sure the business will be equally successful under the ownership of Domino’s Pizza, which will be taking over the lease.”

Asda expands Deliveroo partnership and trials HOP service: Asda is set to launch its first Deliveroo HOP site as well as roll out its partnership with Deliveroo to a further 100 locations across the UK. The rapid Deliveroo Hop service is being trialled at the “Asda Express” convenience store in Tottenham Hale in London, which opened in December. It will see a dedicated picking space in the back of the store as well as a team of Asda colleagues to prepare the orders. This is a model of “HOP” whereby partners own and manage sites while integrating Deliveroo’s HOP technology and leveraging Deliveroo’s logistics network. More than 1,300 Asda products will be available through the service. Simon Gregg, senior vice-president of e-commerce at Asda, said: “We always want to create more opportunities for our customers to conveniently shop their favourite Asda products, so we’re delighted to be offering Deliveroo HOP at our Tottenham Hale store. The trial will provide us with valuable insight into how we can look to leverage our new convenience stores to bolster our last-mile delivery options for customers.” Carlo Mocci, chief business officer UK & Ireland, Deliveroo, added: “We are excited to expand our successful grocery partnership with Asda. As we reach 350 locations across the UK, we are also proud to launch a new ‘Deliveroo HOP’ rapid-delivery trial site in London. Deliveroo HOP is our newest innovation that gives customers a speedier service and improved product availability.” Last year, Asda announced plans to open 30 new Asda Express convenience stores this year and 300 in total by the end of 2026 as it sets its sights on overtaking Sainsbury’s to become the UK’s number two grocery retailer. The next Asda Express stores to open will be Calne in May and Romford train station in June.

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