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Exclusive – Döner Shack relaunches franchise programme following ‘brand transformation’, aiming for 50-50 estate split going forwards: Berlin fast casual kebab concept Döner Shack has relaunched its franchise programme following a “brand transformation” and is aiming for 50-50 estate split between equity and franchise sites going forwards. Founded in 2019 by Sanjeev Sanghera and Laura Bruce, Döner Shack had grown to five UK venues by the start of last year and had initially targeted up to 20 openings in 2023, as well as taking its first steps into overseas markets. However, by the middle of the year, Sanghera had acquired three of the restaurants and several territories back from his franchisees after deciding to focus on company-owned sites. He said the climate at the time meant it would be wrong to force ambitious development on franchisees knowing returns were much slower than anticipated. Sanghera has since worked on overhauling the business and yesterday (Wednesday, 7 February) unveiled its new branding and menu at its Silverburn Shopping Centre site in Glasgow – with its Leeds and Manchester sites up next. “Our new franchise prospectus will be available in the coming weeks and we’re looking for franchisees with real hunger and drive, so we’re focusing on three to five-restaurant deals,” he told Propel. “Only exceptional operators. We are still undergoing the final stages of review after the relaunch, so nothing is planned to open immediately, although we still have franchisees with agreed territories ready to go. Patience is key. The whole estate is now company owned as we repurchased some territories from franchisees last year including all of central London. There will be a 50-50 split now between equity and franchised stores.” Of the rebrand, Sanghera said every facet of Döner Shack had been “significantly enhanced” and that the transformation was “profound”. He added: “Our quest for excellence led us to revamp our IT infrastructure, enhance our kitchen operations, deeply analyse and refine our branding strategy and diversify our menu to cater to a broader audience, including introducing breakfast. We’re also excited to launch our in-house delivery service and kerbside pick-up to reduce our overall reliance on aggregators. Financial optimisation was a key focus, driving us to lower fit-out and kitchen expenses, revise our location strategy to minimise property costs, reduce the square footage required for our outlets, implement innovative systems to decrease kitchen space and staff costs, and renegotiate with both new and existing suppliers to get back to a 75% gross margin. In our pursuit to widen our brand appeal, I personally took to the kitchen to craft some of the finest chicken tenders available, an inviting breakfast menu, sliders, loaded fries, fresh donuts, and our novel sharing box meals, positioning our menu as a standout in the quick-service restaurant sector.”

Next Propel Turnover & Profits Blue Book shows sector companies’ profit outstripping losses by £1.83bn, down from £1.87bn in December and first fall since June 2023: The next edition of the Propel Turnover & Profits Blue Book, which will be sent to Premium Club members tomorrow (Friday, 9 February), shows the profit being made by sector companies is now outstripping losses by £1.83bn. The Blue Book shows the total profit of the 875 companies in the list is £3,902,007,404 and losses are £2,071,816,733. At the time of the last release in December, the Blue Book showed sector companies’ profit outstripping losses by £1.87bn. It is the first time the figure has fallen since June last year, when sector companies’ profit started outstripping losses for the first time since the covid pandemic. The Blue Book shows 564 companies in profit and 265 reporting losses. It is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Premium Club members also receive access to five other databases: the Multi-Site Database, which is produced in association with Virgate; the New Openings Database; the UK Food and Beverage Franchisor Database; the Who’s Who of UK Hospitality; and the UK Food and Beverage Franchisee Database. Members are also to be given access to the entire recording of the 2024 Restaurant Marketer & Innovator European Summit Conference. Members will be sent 30 separate video presentations, featuring more than 60 speakers on Friday, 16 February, at 9am. Propel has evolved its Premium subscription offer by launching Premium Club. All circa 4,000 existing subscribers automatically became members. Premium Club comes with even more benefits. All subscribers will be offered a 20% discount on tickets to four Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Propel Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

Yum! Brands – 218-strong KFC UK deal sees us purchase restaurants with average unit volumes above $2m: Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, has said that the agreement to acquire 218 KFC restaurants from its largest franchisee in the UK is an “exciting opportunity to purchase restaurants with average unit volumes above $2m (£1.58m)”. In December, KFC announced it was to acquire 218 restaurants from EG Group for an undisclosed sum. KFC said the transaction represented 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”. Once completed, all of EG’s KFC UK and Ireland business – more than half of which is made up of drive-thrus – and 7,800 team members will come under KFC UK and Ireland management. Speaking after Yum! Brands reported KFC’s system sales in the UK rose 2% for the fourth quarter ended 31 December 2023, compared with the previous year, Chris Turner, Yum! Brands chief financial officer, said: “This is an exciting opportunity for us to purchase restaurants with average unit volumes above $2m and healthy store level cash margins in a market where we have an exceptional local management team that runs our existing KFC UK equity store base. We expect the addition of these units to provide approximately $40m of incremental Ebitda in the 12 months after acquisition, while the benefit to our operating profit will be largely offset over the next several years due to depreciation and amortisation, including amortisation of reacquired franchise rights, which will be reflected in store level margins post-acquisition. We anticipate this transaction to close during the second quarter.” KFC UK currently operates “a leading set of 50 high-performing company-owned restaurants across the UK and Ireland”.

Slower wage growth boosts case for interest rate cut: Wage growth has eased to its slowest pace in nearly three years, according to a report that strengthens the case for the Bank of England to cut interest rates. According to the latest snapshot of the jobs market by the Recruitment and Employment Confederation and KPMG, the professional services group, greater staff availability and less demand for workers curbed wage growth last month. The snapshot’s permanent starting salaries index fell to a measure of 55.8, still well above the 50-point threshold that separates growth from contraction but broadly in line with its level before the pandemic, reports The Times. The figure suggests that salary growth has moderated after being pushed to record highs by workers demanding pay increases to offset cost-of-living pressures, a shortage of staff and businesses hoarding labour to avoid costly recruitment processes. According to the Office for National Statistics, annual average private sector pay growth peaked at about 8% last year, but since then it has fallen back to about 6.5%.Lower pay settlements have been identified as a requirement for the Bank of England to start cutting interest rates, with it being used to judge whether inflationary pressures remained in the economy. The open permanent positions index edged higher over the past month to 49.3 from 49.2, while the vacancies for temporary roles index dropped to 50.7 from 50.8, indicating that companies are keen to take on workers with more flexible contracts in case the economic downturn continues. Hiring of both permanent and temporary workers contracted last month.