Burger King secures £110 million to fan flames of UK expansion

Burger King plans to up restaurant estate to 700 by 2026  (Burger King UK)
Burger King plans to up restaurant estate to 700 by 2026 (Burger King UK)

Burger King UK has bought all 74 restaurants from its second largest franchise operator through the acquisition of the Karali Group rubber stamping its ambitions to expand the chain from 533 locations to 700 by 2026.

The deal was brokered with funds through the business’ two existing lenders NatWest and Rabobank London in addition to new lender AIG. The fixed-term financing replaces the business’ previous credit facility, secured at the end of last year.

Karali Group is helmed by owner and managing director Salim Janmohamed a long time franchisee of both the Burger King and Wimpy fast food estates. Employees of the Karali Group will now transfer to the core team at the restaurant chain.

The fast food giant famous for its flame-grilled burgers including the iconic Whopper, along with other high street favourites including the Bacon Double Cheeseburger and the Chicken Royale, has plans to open one restaurant a week in Britain until the end of 2022, as it ups the challenge to competitors, including McDonald’s with an estimated 1,300 sites and KFC with just over 1,000 locations.

Alasdair Murdoch, boss of Burger King UK said: “The acquisition of Karali – the largest consolidation Burger King UK 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.

“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.”

The deal will increase the number of directly-owned locations to 266, including sites in London, Liverpool, Manchester, Birmingham and Leeds.

Restaurants acquired as part of the deal will now be absorbed into the group’s remodelling and upgrade programme in what the business said would “deliver an improved customer experience and new visual identity, including pre-order digital kiosks and digital menu screens”.

Janmohamed said: “We are pleased to support this transaction to ensure Burger King UK can continue to enhance the value of this impressive portfolio with the support of its expert leadership team and the dedicated workforce employed today.”

In August, Burger King  gave away free plant-based and vegan burgers to promote ‘National Burger Day’, urging customers to have a “bit more flex” in their menu choices.