More casual dining offerings planned as TRG takes over Barburrito

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EXPERTS hail a ‘strong appetite’ for further consolidation in the casual dining sector following The Restaurant Group’s purchase of Barburrito for £7million.

Law firm Dentons acted as sole adviser to The Restaurant Group (TRG) in its acquisition of the Mexican chain.

Edinburgh-based Dentons division chief Brian Moore, who led the team advising on the deal, said buyers with the necessary cash were looking at opportunities in the UK and Europe.

Brian Moore, Dentons Head Office Division Manager in Edinburgh.

Mr Moore, an expert on food and drink deals, said: “Even when their spending is squeezed by rising inflation, consumers remain loyal to their favorite brands, especially when it comes to to have a meal at the restaurant.

“Our expertise in working with owners of branded hotel portfolios means we know there are other deals just waiting to be done.

“There is definitely a strong appetite among portfolio owners to buy more hotel brands.

“Our experience in the food and beverage industry and in brand protection helped us close this transaction quickly, securing the best deal for TRG.”

Dentons was TRG’s sole adviser on the deal, with Mr Moore joined by his colleague Lorna McCaa from the UK tax team, as well as colleagues Diana Mennie, a senior partner in his Edinburgh office, and Charlotte White, partner in its Glasgow branch.

They were supported by tax advisor John Finnick, real estate partner Brian Hutcheson, real estate partner Graham Ronald and intellectual property partner Ross Nicol.

The law firm has worked with TRG for a long time on numerous mandates.

Dentons’ experience in branded hotel portfolio deals includes advising European restaurant operator AmRest on the acquisition of Sushi Shop Group and the German operations of Kentucky Fried Chicken and Starbucks.

They supported the takeover of Church’s Chicken by High Bluff Capital Partners in the United States and held franchise masterclasses at the annual Global Restaurant Investment Forum in Dubai.

Mr Moore’s comments came after TRG unveiled plans to double Barburrito’s footprint over the next four years, focusing on the south of England.

Barburrito, which was founded in Manchester by Morgan Davies and Paul Kilpatrick in 2005, already has 16 locations in the UK.

Year-to-date, the company has increased like-for-like sales by 20%, outpacing the 14% growth recorded by the broader restaurant industry.

TRG – which owns brands such as Chiquito, Frankie & Benny’s and Wagamama – operates around 400 locations across the UK.

TRG said: “Barburrito’s proposition is well aligned with key consumer trends – including healthy eating, convenience and customizable cuisine – and offers high quality products at attractive prices with an average spend per customer of around £10.

“Barburrito’s current strong trading gives us confidence in its ability to match and extend TRG’s track record of market outperformance.

“The sites have historically generated strong returns on investment in excess of 30% and TRG believes there is significant scope to further develop and expand the brand, particularly in the South of England where the presence is limited.

“The initial expansion plan would be to double the existing domain over the next four years.”

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