Posted:06-December-2023
KFC to acquire 218 EG Group KFC Restaurants in the United Kingdom and Ireland
Yum! Brands’ KFC Division today announced that it has entered into a definitive agreement to acquire over 200 KFC restaurants from EG Group, the company’s largest KFC franchisee in the UK and Ireland.
The transaction represents a significant opportunity to accelerate KFC’s growth strategy in the large and growing UK and Ireland chicken market, with high average unit volumes and robust margins. The experienced KFC UK management team, which currently operates a leading set of 50 high-performing company-owned restaurants across the UK and Ireland, will focus on delivering an enhanced customer experience and deploying its digital strategy to drive higher unit volumes and market share growth.
KFC UK and Ireland has a strong track record of consistent growth that has continued this year, with system sales up 7% and same-store sales up 5% across its 1,040 restaurants. Since 2018, KFC has opened 200 new restaurants across the UK and Ireland, and with the market demonstrating renewed potential since the start of 2023, KFC has previously announced plans to open a further 500 restaurants across the market by 2030.
Once completed, all of EG’s KFC UK and Ireland business – over half of which is made up of drive-thrus – and 7,800 team members will come under KFC UK and Ireland management. This acquisition will cement the compelling leadership position that KFC has built across the UK and Ireland over many years – allowing the business to drive growth and gain market share.
Commenting on the transaction, Sabir Sami, KFC Division Chief Executive Officer, said: “The KFC business is a powerhouse for Yum! globally and the UK and Ireland is one of our strongest markets. Over the past five years, we’ve secured our leadership position within the UK and Ireland chicken market, opening 200 new restaurants, and we’re now close to being a £2 billion business in the UK, thanks to our extremely talented local management team. We’re pleased to add these restaurants to our equity portfolio, in a market where we are well placed to drive strong growth while also making further digital and strategic progress.”
Meg Farren, Managing Director of KFC UK and Ireland, added: “EG has played an important role in helping KFC expand its footprint across the UK and Ireland, and the KFC brand has been a big part of EG’s own growth in recent decades. With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalize on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we’re so proud to serve. On behalf of all of us on the management team, I want to welcome EG’s KFC restaurant team members even closer into the KFC family.”
Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group, said: “We are proud to have been a strategic partner of KFC in the UK and Ireland, playing an important role in helping the brand expand its footprint. Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK. This is the latest transaction in our significant deleveraging this year – to put in place a sustainable capital structure. I would like to thank all the colleagues who have helped deliver such exceptional brand standards and customer service over recent years, including during the COVID-19 period."
Yum! anticipates finalizing the transaction by the end of the first half of 2024. The transaction will be funded from Yum!’s cash flows and is expected to have an immaterial impact on Yum!’s 2024 financial results. With this acquisition, Yum! Brands maintains its highly efficient asset-light strategy including a global restaurant base that’s predominately franchisee-owned.
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