Background

Foodco UK LLP is the UK franchise holder of Muffin Break, an internationally recognised brand with a significant presence in Australia and Canada. Headquartered in Cambridge, the company has a network of 60 high street and shopping precinct sites across the UK, with five run directly and 55 third-party franchised units. All sites have onsite bakeries and café operations providing daily fresh catering including coffee, sandwiches, cakes and pastries. Despite substantial growth since opening its first UK store in Derby in 2001, the company had been fundamentally impacted by COVID-19 with significant rent liabilities accruing from franchisees and stores remaining closed.

Action

FRP was appointed to run an accelerated sale process and swiftly began a marketing process to sell the business and its assets as a going concern. There was a good level of interest in acquiring the business, which led to two firm offers. Our Restructuring Advisory team was able to complete the pre-pack sale of the business and its assets as Joint Administrators within five weeks to Foodco UK Franchising Limited, in a deal which included the novation of the independent franchises, and the transfer of 59 of the 60 leasehold cafés.

Outcome

The sale resulted in the Muffin Break brand retaining its presence in the UK, and indirectly secured the jobs of almost 700 people employed across the Muffin Break franchise network. With individual franchisees committing substantial investment into the brand and their sites over recent years, the deal ensures the continuity of their businesses, and also means they will continue to play a part in their local communities in the years ahead.