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Wed 6th Dec 2023 - KFC UK to acquire EG Group’s 218-strong franchise business
KFC UK to acquire EG Group’s 218-strong franchise business: KFC is to acquire 218 restaurants from EG Group, its largest franchisee in the UK and Ireland, for an undisclosed sum. KFC said the transaction represents a “significant opportunity to accelerate KFC's growth strategy in the large and growing UK and Ireland chicken market, with high average unit volumes and robust margins”. Once completed, all of EG's KFC UK and Ireland business – more than half of which is made up of drive-thrus – and 7,800 team members will come under KFC UK and Ireland management. KFC’s parent company Yum! Brands said it anticipates finalising the transaction by the end of the first half of 2024. It said the transaction will be funded from Yum!'s cash flows and is expected to have an immaterial impact on Yum!'s 2024 financial results. KFC said: “The experienced KFC UK management team, which currently operates a leading set of 50 high-performing company-owned restaurants across the UK and Ireland, will focus on delivering an enhanced customer experience and deploying its digital strategy to drive higher unit volumes and market share growth. This acquisition will cement the compelling leadership position that KFC has built across the UK and Ireland over many years – allowing the business to drive growth and gain market share.” KFC UK and Ireland said it has “a strong track record of consistent growth that has continued this year”, with system sales up 7% and like-for-like sales up 5% across its 1,040 restaurants. Since 2018, KFC has opened 200 new restaurants across the UK and Ireland, and has previously announced plans to open a further 500 restaurants across the market by 2030. Sabir Sami, KFC division chief executive, said: “The KFC business is a powerhouse for Yum! globally and the UK and Ireland is one of our strongest markets. Over the past five years, we've secured our leadership position within the UK and Ireland chicken market, opening 200 new restaurants, and we're now close to being a £2bn business in the UK, thanks to our extremely talented local management team. We're pleased to add these restaurants to our equity portfolio, in a market where we are well placed to drive strong growth while also making further digital and strategic progress.” Meg Farren, managing director of KFC UK and Ireland, added: “EG has played an important role in helping KFC expand its footprint across the UK and Ireland, and the KFC brand has been a big part of EG's own growth in recent decades. With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalise on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we're so proud to serve. On behalf of all of us on the management team, I want to welcome EG's KFC restaurant team members even closer into the KFC family.” In March 2020, EG Group acquired the 146-strong Herbert Group, the then largest KFC franchise in the UK and Ireland. Zuber Issa and Mohsin Issa, co-founders and co-chief executives of EG Group, said: “We are proud to have been a strategic partner of KFC in the UK and Ireland, playing an important role in helping the brand expand its footprint. Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK. This is the latest transaction in our significant deleveraging this year – to put in place a sustainable capital structure. I would like to thank all the colleagues who have helped deliver such exceptional brand standards and customer service over recent years, including during the covid-19 period.” KFC features in the Propel Turnover & Profits Blue Book. Its turnover of £292,915,000 in the year to 26 December 2021 is the 34th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. 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 kai.kirkman@propelinfo.com to upgrade your subscription.


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