Risk Capital Partners takes majority stake in Red Hot World Buffet

By Mark Wingett

- Last updated on GMT

Related tags: Investment

Red Hot World Buffet founders Helen and Pammie Dhaliwal
Red Hot World Buffet founders Helen and Pammie Dhaliwal
Risk Capital Partners, the Luke Johnson-led investment vehicle, has completed the acquisition of a majority stake in Red Hot World Buffet (RHWB), the seven-strong group, founded by Helen and Parmjit Dhaliwal.

Johnson, who will become chairman of RHWB’s new holding company, told BigHospitality's sister publication M&C Report that Risk had been attracted to the business because it offers 'great value, great choice, popular with families and major economies of scale with such large restaurants'.

He said: “We think Red Hot are the best operators in the segment, offering superior quality but still highly affordable. Their portfolio also has a very reasonable rent roll.”

Risk’s investment, which is thought to value the group at up to c£20m, will initially pay for restaurant upgrades and the opening of an eighth site in Leicester next year.

The business plan backed by Risk Capital will see the current management team remain, augmented by James Horler, initially in a part time capacity. Horler has previously grown restaurant businesses such as Frankie & Benny’s and La Tasca as chief executive.

Pammie Dhaliwal said: “This is an exciting time for us and all the staff who have been involved in making Red Hot World Buffet a success since we launched our first restaurant in 2004.

“Risk Capital’s investment solidifies our growth ambitions and provides the financial and strategic support to help us capitalise our market offering. We are looking forward to what the future holds.”

Growth plans

Johnson said: “We have been talking to Pammie and Helen for over three years and are delighted to have made this investment. We believe the buffet dining space to be one of the fastest growing segments of the UK’s restaurant market and that Red Hot offers great choice and great value for money to its customers in these challenging times. We are looking forward to working with the Founders and the wider management team to help them in their ambitious growth plans.”

The company has ambitions to grow its estate to 25 UK sites by 2015 and believes the UK can accommodate 80 Red Hot units eventually. It is currently eyeing up openings in Sheffield and Glasgow.
It is thought that Risk has been in exclusive talks to investment in the company, which was founded in 2004, since the beginning of the year.

As revealed by M&C Report, the company appointed BDO to advise it on its options in September 2011, with Piper Private Equity, Bowmark Capital, Isis and LDC all showing an interest in the business.
Earlier this year, RHWB invested £2.7m in its latest site in Nottingham, which it described as being the “first of its kind” and a coming of age for the brand.

Aside from its c10,000sq ft-plus format, the company is to look at developing a smaller 'express' format as it continues to seek expansion opportunities across the UK.

Dhaliwal, co-founder told M&C Report that the group would look at 7,000sq ft sites in strategic towns to further roll out the brand, while also concentrating on major cities for its core 10,000sq ft restaurants.

He said: “Smaller towns are very much under consideration going forward and something we will need to consider as we grow. We are building up experience all the time and a smaller format is something we believe we can deliver.”

This story was first published by M&C Report. To subscribe call Emily Croft on 01293 846578 or email rzvyl.pebsg@jeoz.pbz​.

Related topics: Business, Restaurants, Venues

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