A handful of private equity players are currently jostling to take control of the UK arm of TGI Friday’s and tap into the expertise of its much respected managing director Karen Forrester, but where does the business go from here? Could we see a new The Restaurant Group about to emerge? And isn’t a week a long time in the UK’s late-night sector.

It is understood that tomorrow will see second round bids submitted for TGI Friday’s 64-strong UK business, which is believed to be valued at c£230m-£250m, with ex-Wagamama backer Lion Capital believed to one of the group’s suitors.

One of the key attractions for potential suitors is backing and working with the company’s chief executive Karen Forrester, who has led the reinvigoration and growth of the business since she took the helm back in 2007. Unlike the majority of brand’s global estate, the UK arm has delivered consistent growth over the last five years and shows no sign of slowing up just yet.

The work carried out by Forrester and her team in re-energising chain has been so impressive that the look and feel of its revamped sites have become an influence on the international chain’s units around the globe. Forrester now also sits on its global executive board.

Its success has been based on placing its employees at the centre of its focus, alongside the continued evolution of its offer, which has seen the food side of its business improved and ramped up.

For example, the company spends twice as much on its employees as on advertising. Forrester said that at least twice a year team members are given an ‘all-store’ party paid for by TGI Friday’s. “Some of these restaurants have 140 team members so covering it can be a bit of a nightmare but we do it because we get the right results,” she said. “Yes, it does come at a cost but it’s a real investment in my view. We spend pretty much double on training, recognising and celebrating with our people than we do on advertising our brand because that’s the right thing to do. And that number continues to grow in cash terms. But that return continues to grow dramatically.”

The payback is that staff turnover at the company has reduced from 147% to 35% over four years.

The group’s food, a perceived weakness in the past, is now winning awards, with Terry McDowell, the brand’s food development manager and chef, this year topping the Casual Dining category at the 2014 MIDAS Awards beating competition from Coast to Coast and Gourmet Burger Kitchen in the process.

The numbers back up the progress. The business reported EBITDA of £19.9m in 2013, while turnover increased to £166.8m in the 53 weeks to 30 December 2013, from £147.7m the year before. Like-for-like sales climbed 3.6%.

Not that Forrester is resting on her laurels. As highlighted by her panel appearance at last week’s Fourth conference, she is already looking at the next hurdle the brand has to get over, with insights from the company’s employee engagement programme showing that casual dining and its “clunky processes” running the risk of alienating younger employees and customers.

 “Generation Y want to know the why of everything,” she said. “But they have no patience, which is a problem for casual dining, which is quite a clunky business. So how can we take out the clunky, cumbersome processes?”

As part of finding a solution to that problem, the company launched a new “Fast Track” format at Manchester Piccadilly station, its first site at a transport hub, earlier this year.

Part of its aim to reach 120 UK locations by 2020, it is the learnings from this streamlined, more fast-casual offer, that Forrester is thought to be keen to introduce across the company’s core estate over time. Of this 120-site target, the company believes there is opportunity to operate c80 sites under its core format.

Now the increasing competition to find these sites, especially in the regions – TGI Friday’s is not heavily exposed to the London market – will make reaching that 120-target harder. And for any suitors the question will be where can the brand grow from here. An international play in this case is not an option, unless current backers Sentinel Capital and TriArtisan Partners throw in some international territories to sweeten the deal.

All will want to tap into Forrester’s undoubted expertise, but also to keep her motivated and incentivised. In this respect, a consolidation play will surely be an avenue explored rather the development from scratch of a new concept. A further complementary brand acquired, maybe two, before the enlarged Forrester-led group’s new owners look to go public in two to three years. As the flight to the regions plays out and the market moves closer to consolidation, I can’t think of many people who could be better positioned than Forrester to lead that play.

Light at the end of late-night tunnel?

A week is a long time in the UK’s late night sector. Last week, I used this column to muse of the fact that the sector finds itself in a paradox, with many sector investors telling me that “they wouldn’t like to be in the late-night market right now”, while one or two others mused on the possibility of consolidating the whole market, creating a c£100m-turnoverbusiness in the process.

I even suggested that the sale of Intertain could prove to be a catalyst for what many would see as a bold, nay brave, move. Well throw an acquisitive Luminar in the mix and, if speculation is right, a New Inventive Bar Company gearing up to go public, and the market could indeed be in line for further M&A activity over the coming 12 months. That’s not forgetting Eclectic Clubs & Bars, which will be keeping a watching brief on proceedings as it finds its “listed feet”.

At present, opportunities exist through regional operators such as Fever Tree and Tokyo Industries, while on the bigger ticket front Novus Leisure may be still an option as new chief executive Toby Smith gets to grips with the business.

Perhaps the bolder move, and in line with the majority of the above looking to be nimbler with their formats, including TGI Friday’s, would be to look at the continuing success of the Piper-backed Be At One. It continues to report impressive year on year like-for-like growth and is confident that it can eventually grow its estate to up to 120 sites in the UK on the back of the success of its initial regional openings. The music has started up again for the UK’s late night sector, now to pick the right partner.