The Restaurant Group acquires Japanese restaurant chain Wagamama for £559m and plans to scale franchise further
It’s well known that food franchises are highly lucrative, whether it’s fast food, salad bars, dessert joints or even regular eateries. So The Restaurant Group (TRG) certainly had good reasons to snap up British chain Wagamama, which specialises in Japanese and Asian cuisine, for a whopping £559m. Of that sum, £357m was paid in cash and the rest with debt and by issuing new shares.
TRG is the parent brand to high-street chains such as Garfunkel’s, Frankie & Benny’s, Chiquito and Joe’s Kitchen. It plans to expand Wagamama further throughout the UK and said it will convert “selected TRG sites” into branches of the Asian chain. Where most of its restaurants focus on Tex-Mex, traditional British cuisine and more western food, the deal marks a new vertical for TRG to tap into.
In fact, TRG said Wagamama had "consistently and significantly outperformed its core UK market” and that “Wagamama is well aligned to key structural trends, addressing customer demand for speed of service, delivery and healthy options.” In a time where a swathe of chains like Byron, Jamie’s Italian and Prezzo are downsizing due to sluggish sales and Brexit uncertainties, this Asian cuisine chain has remained largely unaffected by the slump. Indeed, Wagamama saw the opening of seven new restaurants in the UK in 2018 and 13 new eateries globally. The chain was founded by restaurateur Alan Yau in 1992. He has also created the Michelin-starred Chinese restaurants Hakkasan and Yauatcha.
Commenting on the take over, Andy McCue, CEO of TRG, said: "The transaction not only gives us a great brand but also creates a business with a multi-pronged growth strategy which will enhance earnings with continued selective UK rollout, accelerated via conversions of some TRG sites, by further leveraging the brand in concessions both in the UK and internationally, by maximising the opportunities presented by the rapidly growing delivery sector and by optimising the potential within international markets."
The company now plans to explore international growth by capitalising on Wagamama's established international presence. Looking at this new acquisition, we can be sure the company will definitely continue to attract foodies in the future.