KFC to acquire 218 restaurants from EG Group

06-Dec-2023 - Last updated on 06-Dec-2023 at 17:19 GMT

KFC is to acquire more than 200 restaurants from EG Group, its largest franchisee in the UK and Ireland.

The fried chicken giant, which is owned by Yum! Brands, says the transaction 'represents a significant opportunity' to accelerate its growth strategy in the region and expand its corporate estate.

Once completed, all 218 of EG’s KFC restaurants – over half of which is made up of drive-thru locations – and 7,800 team members will come under the management of KFC UK and Ireland.

“The KFC business is a powerhouse for Yum! globally and the UK and Ireland is one of our strongest markets,” says Sabir Sami, KFC division chief executive officer.

“Over the past five years, we’ve secured our leadership position within the UK and Ireland chicken market, opening 200 new restaurants, and we’re now close to being a £2bn business in the UK, thanks to our extremely talented local management team.

“We’re pleased to add these restaurants to our equity portfolio, in a market where we are well placed to drive strong growth while also making further digital and strategic progress.”

KFC UK and Ireland has seen system sales up 7% this year and same-store sales up 5% across its 1,040 restaurants.

Since 2018, it has opened 200 new restaurants across the territory, and has previously announced plans to open a further 500 by 2030.

“With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalise on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we’re so proud to serve,” says Meg Farren, managing director of KFC UK and .

The deal, which is expected to complete in the first half of 2024, comes after Asda agreed to buy EG Group’s UK and Ireland operations for an enterprise value of £2.27bn earlier this year.

“Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK,” says Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group.

“This is the latest transaction in our significant deleveraging this year – to put in place a sustainable capital structure.”

Yum! adds that the transaction will be funded from its cash flows and is expected to have an 'immaterial impact' on its 2024 financial results.