Coronavirus: Burger King Offers Restaurant Closures Under Pre-Pack Agreement | Economic news

0
94


Burger King, the fast food giant, is preparing to close a number of its UK restaurants as part of a restructuring process sparked by the coronavirus pandemic.

Sky News has learned that Burger King’s UK operations have recruited advisers from AlixPartners to review options at one of its subsidiaries, which directly owns around 25 of the chain’s outlets.

Sources said the company is looking at a corporate voluntary arrangement (CVA) or, more likely, pre-pack administration for the branch.

Image:
The brand, like its rivals, has seen sales hit hard by the coronavirus lockdown

The restructuring could result in the permanent closure of up to 10 of its restaurants with a number of potential job losses, they added.

Burger King’s master franchisee in the UK is private equity firm Bridgepoint, former owner of Pret A Manger.

Bridgepoint took on this role in 2017, when it acquired the exclusive rights to the Burger King brand.

In total, the chain does business with around 530 restaurants in the UK, with some locations yet to reopen following the UK-wide lockdown.

The primary franchisee directly owns approximately 118 of the 530 sites.

Insiders have indicated that a broader restructuring of the company is a possibility, based on new peaks in COVID-19 cases and forced restaurant lockdowns and closures.

Bridgepoint has reportedly discussed a refinancing of the Burger King business to allow the funds to be invested in opening more drive-through restaurants.

Rival McDonald’s is believed to have traded well since the UK-wide lockdown ended in June, in part due to its larger domain behind the wheel.

Burger King is reportedly keen to open at least 30 new drive-thru locations in the UK next year.

Alasdair Murdoch, managing director of Burger King in the UK, has strongly criticized the development of policies towards the hospitality sector since the onset of the COVID-19 crisis.

In March, he said the chain would not pay its quarterly rent bill and called on business owners to work with food and beverage operators to resolve the growing impasse between them.

“This crisis is affecting the entire UK economy, which will take time to recover,” Mr Murdoch wrote in an open letter to owners.

“The hospitality industry is particularly important to the UK economy. It is the third largest employer in the private sector, employs 3.2 million people and is [twice as large as] the financial services sector “.

Britain’s casual and foodservice industries have suffered a devastating blow from the pandemic.

This week, Cote, the French catering group, became the latest company to succumb to financial pressure from the coronavirus when it was sold through a pre-pack administration to new investors.

A number of other burger chains have changed hands as well, including Byron, which saw hundreds of jobs wiped out under a pre-pack deal over the summer.

GBK is also changing hands.

The Burger King brand is owned globally by Restaurant Brands International, a New York-listed company.

Burger King and Bridgepoint declined to comment on Tuesday night.

LEAVE A REPLY

Please enter your comment!
Please enter your name here