The roadside restaurant, first popularised in America, has now become a firm staple of the British motorist’s way of life. Popular chains such as Burger King, McDonald’s and Costa Coffee can all be spotted in motorway service stations, with these branches often proving equally or more profitable than their town centre equivalents.
However, this has made the commuter market hugely competitive and has caused significant problems for smaller chains seeking to profit from passing trade. One such chain is “original” British rest point Little Chef, which suffered a high-profile administration in 2007 before being rescued by turnaround specialist RCapital.
RCapital placed the chain on the market earlier this year after returning it to profitability – causing industry experts to speculate whether the name would vanish as rivals looked to take over and re-brand all Little Chef properties. Fortunately, the chain’s future now looks to be secure thanks to a successful deal struck between RCapital and Kuwaiti restaurant group Kout Food Group.
The deal, worth £15 million, includes the Little Chef brand, estate and 81 of the 83 UK-wide commercial properties currently operated by the company. While this is less than the £20 million originally asked for by RCapital, the previous owner will retain two restaurants in order to recoup funds into the future.
Little Chef will now be run by a subsidiary of Kout Food Groups, known as Kout Food Group Restaurants UK. Chairman Fadwa Al Homaizi spoke of his enthusiasm in helping the chain achieve its potential.
He said; “KGFR-UK has exciting plans to revitalise the Little Chef brand.
“Little Chef will benefit from a process of brand renewal in keeping with current trends, supported by traditional British values.”
Kout is no stranger to the UK restaurant industry, being the owner of the Maison Blanc restaurant chain and operating more than 40 Burger King and KFC premises. It is hoped that this knowledge of the UK food industry will help the 50 year old brand become a true competitor in the roadside eatery market and provide strong competition for the American brands currently dominating the market.
Additionally, while Kout has yet to reveal its plans for the future of Little Chef, it is thought that the chain’s 1,100 existing staff members will be assured of the security of their jobs in the coming weeks. In a time where zero-hours contracts have dominated the news, this will surely come as a welcome relief to those left in limbo since the chain was placed on the market.
Should Kout succeed in revitalising the Little Chef brand, it would certainly be a boost for struggling British businesses everywhere – proving that, amidst harsh economic conditions, the ability to fight larger competitors and win still exists. However, the question is whether the Kuwaiti firm will be able to bring Little Chef back to the top when others, such as celebrity chef Heston Blumenthal, have failed.
Do you choose to eat at Little Chef if undertaking a long journey on the motorway, or do you prefer larger brands such as McDonald’s or KFC?
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