The Restaurant Group has confirmed it is offloading its Frankie and Benny’s and Chiquito sites to the owner of Cafe Rouge, The Big Table Group.
As part of the deal, the Wagamama owner will pay a cash contribution of £7.5m to the acquirer to take the 75 underperforming sites off its hands.
The deal is expected to be completed in the fourth quarter of this year, and TRG said it hopes it will improve its adjusted EBITDA margins by 100bps in the first full year.
The two chains have held back TRG’s ability to get its finances back on track, with their sales lagging behind the group’s star performer Wagamama and its pubs and concession business.
Earlier this year, TRG said it would reduce its estate by about 30 per cent, as it looked to cut loss making sites to boost profit.
The group wants to focus on Wagamama alongside its pubs and concessions businesses.
However, it has plans to open six Wagamama sites during the year and is setting a target to open between eight to 10 sites per year from 2024 onwards.
“A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase Adjusted EBITDA margins and reduce leverage,” Andy Hornby, chief of TRG, said.
“On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the leisure business who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.”