Caskade Caterers et al. - Case Update

Kirstie Provan, Robert Ferne and Gary Shankland of Begbies Traynor and Anthony Wright of FRP Advisory have secured yet another rescue deal in the quick service restaurant sector, this time selling 40 KFC restaurants out of administration and saving 900 jobs in the process.

Caskade Caterers Limited, Caskade 2020 Ltd, Castlebarn Limited and Grovemaze Limited (collectively, the “Caskade Group”) operated 53 franchised restaurants under the KFC brand via franchise agreements with Kentucky Fried Chicken (Great Britain) Limited. The Caskade Group is headed by its CEO and sole director, London-based businessman Mr Hamid Ali, and employed approximately 1,100 staff across its restaurants and head office.

Despite reporting positive EBITDA performance, the companies suffered financial difficulties throughout 2023 and early 2024, including as a result of the enforced closure of three of the Caskade Group’s better performing restaurants during September and October 2023, the cessation of a major online food delivery network which accounted for a significant portion of the companies’ turnover, and significant intra-group loans and cross-funding being provided to connected parties, including certain companies which operated under an alternative brand, to aid their expansion and support liquidity.

This led to a build-up of significant creditor arrears, including unpaid tax arrears of approximately £3 million.

A non-binding offer for the Group’s shares was received from an unrelated third party in early 2024. However, the offer was revised materially downwards due to concerns over the underlying financial performance of the Group and wider concerns raised during due diligence. The offer was ultimately withdrawn.

Kirstie Provan, Robert Ferne and Gary Shankland of Begbies Traynor and Anthony Wright of FRP Advisory were appointed joint administrators on 26 June by Santander UK PLC, the qualifying floating charge holder. The same professionals were also recently appointed as the administrators of a group which operated 51 Taco Bell franchise restaurants prior to their administration and a pre-pack sale.

Similar to the result in that case, the joint administrators here were able to secure a pre-pack sale of 40 of the Caskade Group’s restaurants to The Adil Group, one of the largest family owned quick service restaurant operators in the UK, for total consideration of £17.55 million. Approximately 900 employees were transferred pursuant to TUPE.

The administrators’ proposals can be found HERE. They have been assisted by TLT, Pinsent Masons, Berg Kaprow Lewis, ERA Solutions and Eddisons.