Byron Burger is once again staring into the chain restaurant abyss, as its current owner seeks to offload the beleaguered burger group, via an administration process that could result in restaurant closures and job losses.
Famously Proper, the current parent company of both Byron and fried chicken brand Mother Clucker, has filed a notice of intention to appoint administrators, according to the Business Desk; the possibility of a sale was first rumoured in November of last year. It is set to close around 10 of Byron’s 21 remaining restaurants as part of the process, according to Sky News.
If a business files such a notice, it allows it to pursue various options — including a so-called “pre-pack administration,” in which a buyer would acquire Byron’s assets, but not its liabilities and debts — without any people or business to whom it owes money taking action.
This administration would be the third in just over four years for Byron, which was most famous first for opening a chain whose restaurants had their own identities, and then for assisting the Home Office in an ambush immigration raid on its own employees. In 2018, private equity firm Three Hills Capital bought it, closing 16 restaurants in the process; it closed 31 more, at the cost of 650 jobs, in summer 2020. Then, another firm, Calveton, acquired the brand, with Three Hills maintaining a minority stake and Famously Proper taking over the operations of the burger restaurants.
While the COVID-19 pandemic definitely prompted the 2020 auction of the brand, and ensuing administration, its longer term troubles are symptomatic of a private equity chain restaurant bubble that decisively burst between 2018 and 2020. At its peak in 2013, Byron sold to investment firm Hutton Collins for £100 million; by the time Calveton acquired 20 restaurants out of administration in 2020, it paid £4 million.
A similar story has played out at the likes of Bella Italia, Cafe Rouge, Gourmet Burger Kitchen, Carluccio’s, and Pizza Express. They are all examples of successful, small restaurant brands that have been inflated by private equity beyond a scale that their offer can withstand, creating a fragile business model that, as the “casual dining crunch” of 2018 proved, was already unsustainable, pandemic or no pandemic, Brexit or no Brexit.
Update: 11 January, 2023, 2:30 p.m.: This article was updated to include further information on the terms of Byron’s proposed administration.