Burger King secures £35m of new funding, agrees new RBI deal, FY lfl sales up 11%, signs up former largest UK McDonald's franchisee

Burger King UK, the Alasdair Murdoch-led, Bridgepoint-backed business, has secured £35m of new funding to support its growth strategy, which will include adding 60 new sites over the next 24 months, as it saw a 11% increase in like-for-like sales for the year to 31 December 2022. It comes as the business, which has 553 restaurants, 279 of which are directly owned and the remainder sub-franchises, has signed up Atul Pathak, formerly the UK’s largest McDonald’s franchisee, as a new franchisee to aid its continued growth.

The group has agreed the additional £35m of funding from Bridgepoint, which will support continued expansion of the company through the opening of new restaurants and investment in the existing estate. At the same time, it has agreed a new long-term deal with Restaurant Brands International (RBI), the US-based owner of the Burger King brand.

For the year to the end of 2022, the business reported total revenue up 39% to £294.5m (2021: £211.7) and like-for-like sales growth of 11%, as it said it continued to outperform the wider quick service restaurant (QSR) market. While the business said trading was resilient, underlying Ebitda of £15.2m was down versus 2021 (£33.1m), with margins impacted by the “significant rise in food inflation experienced across the industry during 2022 as well as higher utility prices”.

However, the group said it was encouraged by early signs of margin improvement into 2023 as the rate of food cost inflation falls, with margin recovery also underpinned by an “increasing focus on cost discipline”. An operating loss for the year of £20.6m (2021: profit of £33.5m) was attributed to non-recurring costs and includes those associated with the acquisition of the 74-strong Karali Group – its then largest franchisee – in addition to one-off, non-cash impairments on leases and goodwill linked to the challenging market environment.

Burger King UK added 106 new owned restaurants to its portfolio during 2022, with the opening of 32 new restaurants across the UK and the acquisition of all 74 Burger King restaurants from the Karali Group, following its acquisition in September 2022. The business said it had also made strong progress with its remodelling programme, with 32 restaurants upgraded in 2022, including its Leicester Square flagship, and a further ten to be completed by the end of 2023, including Manchester Piccadilly and Thorpe Park, delivering improved customer experience through digital investment and restaurant environment. It invested more than £1m in its Leicester Square restaurant, which it said led to double-digit sales growth.

The company said it had also made progress on its “Burger King for Good” ESG strategy – with a 25% decrease in Scope 1 and 2 emissions and a commitment to remove all plastic lids for dine-in transactions, saving more than 30 tonnes of plastic a year. The company said it also continued to invest in digital transformation alongside its customer offering, with the launch of its UK-wide loyalty scheme within the Burger King UK app. It said the scheme’s personalised and digitally led offers have driven strong customer engagement, with more than two million users of the Burger King UK app, helping drive growth in click and collect services.

Alongside this, the business said it continued to expand its home delivery offering through partnerships and new agreements with the likes of Deliveroo, Just Eat and Uber Eats. It said digital sales, which includes home delivery and click and collect, now “represent an important and significant sales channel”.

Murdoch, chief executive of Burger King UK, said: “I am pleased to announce a resilient full year performance and strong strategic progress in 2022 as we announce ambitious plans to open 60 new restaurants over the next two years. We have continued our rapid expansion in the UK and delivered good growth during the year, despite industry-wide headwinds. Alongside new restaurant openings and the acquisition of our largest franchise partner, Karali Group, we continued our strategic focus on growing digital sales, including home delivery and the introduction of our loyalty scheme on the Burger King app. We also continued to invest in our customer proposition – our remodelling programme is well underway, with 42 restaurants being upgraded during 2022 and 2023, and we are progressing our menu innovation to cater to all preferences. Looking ahead, we see significant opportunity for further growth and are encouraged by the strong pipeline of new openings, supported by additional funding from Bridgepoint.” 

Source: Propel

Interested and want to know more about Burger King ?

The Burger King profile outlines all aspects of their franchise opportunity and allows you to contact them for further information or to ask a question.

View franchise profile