In its most recent round of reorganisation, Byron may close nearly half of its surviving restaurants, according to sources.
According to a report from Sky News, a pre-pack administration agreement will result in the permanent closure of 10 of the remaining 21 locations of the burger brand.
The business is reportedly being advised by administrators at Interpath Advisory, and a sale may close soon.
This is Byron’s second experience with closures in less than three years. Investment company Calveton purchased 21 of the group’s 51 sites out of administration in July 2020 for £4 million.
The 2007-founded burger franchise was originally offered for sale to private equity company Hutton Collins in 2013 for £100 million
Owners seeks to offload the burger group, via an administration process
According to the Business Desk, Famously Proper, the current parent company of both Byron and the fried chicken brand Mother Clucker, has filed a notice of intention to appoint administrators. A sale was first suggested in November of last year. According to Sky News, approximately 10 of Byron’s 21 remaining locations will close as a result of the process.
In the event that a company files such a notice, it is then free to pursue several options, such as a so-called “pre-pack administration,” in which a buyer would take over all of Byron’s assets but not its liabilities or obligations.
This would be Byron’s third administration in just over four years. Byron was most known for starting a chain of eateries with distinct identities and then helping the Home Office conduct an ambush immigration raid on its own staff. Three Hills Capital, a private equity group, purchased it in 2018, closing 16 locations in the process. In summer 2020, it liquidated 31 more restaurants, costing 650 jobs. The brand was later purchased by another company, Calveton, with Famously Proper running the burger restaurants and Three Hills maintaining a minority ownership.
Small restaurant brands that have been inflated by private equity
Similar incidents have occurred at restaurants like Pizza Express, Bella Italia, Cafe Rouge, Gourmet Burger Kitchen, and Cafe Rouge. They are all examples of successful small restaurant brands that have been inflated by private equity beyond the capacity of their offerings, resulting in a brittle business model that was already unsustainable, pandemic or no pandemic, Brexit or no Brexit, as the “casual dining crunch” of 2018 demonstrated.
Read more: Chester’s Boujee bar and restaurant exits administration
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.