Iconic 80s business, Little Chef, sold (again) to Kout Food Group

For many family car journeys in the 70s and 80s there were often two certainties; the first one being the inevitable question “Are we there yet?” and the second one being a family visit to a Little Chef. Motorway services up and down the UK didn’t offer McDonalds, Starbucks, Costa, KFC or Burger King, and there certainly weren’t M&S or Waitrose outlets available. The one consistent presence across many of the services tended to be a Little Chef restaurant. This phenomenon wasn’t limited to motorways; at the height of the chain’s success, there were over 300 Little Chef restaurants located on “A” roads and many popular tourist routes.

The announcement that Little Chef will now be sold to Kout Food Group, the UK arm of the Kuwaiti listed restaurant and hotels company Kout Food, for GBP 15.00 million is yet another change in ownership for the restaurant chain that has struggled for some time to recapture its former glories of the 70s and 80s.

The company was first set up back in 1958 and was modelled on American style diners that founder Sam Alper had seen in the US. The Little Chef concept was then developed by catering company Gardner Merchant, which became a subsidiary of Trust House, which in turn merged with Forte to become the Trust House Forte Group. In 1996 Granada successfully took over Trust House Forte and then in 2000 Granada merged with Compass Group, subsequently demerging a year later. Little Chef remained part of Compass Group and it was from here that the real ownership merry-go-round began.

Permira Private Equity paid around GBP 712.00 million for Little Chef and Travel Lodge in February 2003. Two years later Peoples Restaurant Group acquired the Little Chef restaurant chain from Permira for a lowly GBP 52.00 million, reflecting the significant decline in performance of the restaurants. In January 2007 R Capital stepped in and purchased 193 of the outlets from the administrator and earlier this year there was speculation that the private equity investor was considering a sale. Buyers linked to the Little Chef chain before Kout was confirmed as the latest owner included Starbucks, Costa, Moto and Welcome Break. Ironically all the companies who have replaced the iconic Little Chef brand at motorway service stations and “A” roads up and down the UK.

Given that Kout Foods predominantly run Burger King and KFC outlets in the UK, I would have to believe that it’s not the brand that the company wishes to save but the real estate locations.