Burger King UK (BKUK) has announced the indirect acquisition of all 74 Burger King restaurants from its second largest franchise partner, through the acquisition of Karali Limited and Teresina Limited – the Karali Group.
BKUK has secured £110m of fixed-term financing in order, from three blue-chip lenders, to support its ambitious growth strategy, which includes expanding its own and sub-franchised restaurant portfolio, from 533 currently, to more than 700 by 2026.
The fast-food chain, which owns the master franchise in the UK, said this portfolio growth would be achieved through new restaurant openings, of which it has around one planned per week for the remainder of 2022, as well as selected franchise acquisitions.
The £110m will in-part be used to fund the acquisition of the 74 sites from Karali Group, which includes 36 drive-thrus, and will take BKUK’s directly-owned restaurant estate up to 266 sites. Karali’s sites also include nine in-line restaurants, 27 shopping centre locations and two leisure restaurants.
The acquired sites will be incorporated into BKUK’s remodelling programme, which aims to offer an improved customer experience and new visual identity, including pre-order digital kiosks and digital menu screens.
The fix-term financing has been secured from the business’ two existing lenders, NatWest and Rabobank London, alongside new lender AIG, and replaces the business’ previous credit facility, secured at the end of 2021.
Alasdair Murdoch, CEO at BKUK said: “The acquisition of Karali – the largest consolidation BKUK has made – marks an important milestone for the business, bringing more restaurants under our ownership, enhancing value and driving operational efficiencies. We believe that we have a strong expansion pipeline and are well positioned to take advantage of the clear market opportunities ahead.
“I would like to thank the team at Karali, led by owner and managing director Salim Janmohamed, for their contribution to the Burger King presence in the UK for over four decades. As one of the longest standing franchise partners, Karali’s dedicated team have ensured Burger King stores continue to best serve our customers while achieving impressive growth.”
Salim Janmohamed, owner and managing director at Karali said: “Over the course of our long-standing partnership with the Burger King brand, Karali worked tirelessly over 15 years to build a substantial, balanced portfolio of Burger King franchise stores and achieve its success today. This nation-wide, 74-restaurant portfolio is performing exceptionally well based on a resilient financial platform and supported by strong operational management, a first-class team, and a growing customer base.”
Since the start of 2021, BKUK has added 70 owned restaurants to its estate comprising 39 new restaurant openings and the acquisition of 31 sub-franchised restaurants.
