FRP have completed the sale out of administration of Foodco UK LLP, the UK franchise holder of the café brand Muffin Break, in a deal that indirectly secures the livelihoods of almost 700 people employed across the Muffin Break franchise network.
Muffin Break, which is headquartered in Cambridge and has a network of 60 owned and franchised cafés across the UK, specialises in made-on-the-premises fresh food and beverages. Its first UK store opened in Derby in 2001 and it has since grown its franchise network to establish locally owned cafés on high streets nationwide.
Joint Administrators Steven Ross and Tonya Allison, Partner and Director in our Restructuring Advisory team, as well as Partner Allan Kelly and Assistant Manager Shaun Hudson, have been working with Foodco UK in recent weeks to restructure its operations after the business and its franchised network were forced to close during the COVID-19 lockdown.
On appointment, the Joint Administrators completed the pre-pack sale of the business and its assets to Foodco UK Franchising Limited. This included the novation of independent franchises and resulted in the transfer of 59 of the 60 cafés across the UK in a move that secures the future of almost 700 jobs.
Tonya Allison, Director at FRP, said: “Before the pandemic, the business had been trading profitably and was targeting an ambitious growth strategy. However, the volatility and restrictions arising from the coronavirus pandemic saw the closure of its stores and this severely impacted trade and cash flow. This sale helps retain an established high street brand and indirectly saves almost 700 jobs, which is a huge positive in what is a very tough time for the high street.”
Michael Arbuckle, Director at Foodco UK Franchising Limited, added: “The Muffin Break brand has seen substantial investment from the individual franchisees and importantly this deal ensures the continuity of their businesses. The past few months have created challenges that no one in the leisure and hospitality industry could have foreseen at the beginning of this year and we are very grateful for the support and understanding of our landlords and other key stakeholders during what has been a very testing time. We actively engaged with these groups early on and their support of this sale ensures we’re now on a stronger footing and confident about the future opportunities for Muffin Break. More importantly, this sale also means that more than 50 franchisees will continue to play a part in their local communities.”
Our team was advised by Wedlake Bell LLP, including Tal Goldsmith (Restructuring), Marc Leyshon (Real Estate) and Adam Betts (Commercial).