Member Article

North West mexican fast-food chain receive £3.25m investment

Business Growth Fund have invested £3.25m in the North West with Mexican street food chain, Barburrito.

The equity investment will fund an active rollout programme with the business planning to triple its number of restaurants to 18 sites over the next four years, the bulk of which will be in prime locations in London.

Founded in 2005 by Manchester based entrepreneurs, Morgan Davies and Paul Kilpatrick, Barburrito is a chain of Mexican fast-food restaurants that stated as a single unit and now operates from six sites in Manchester, Liverpool and Leeds, employing over 100 people.

Net revenues for the financial year 2012 hit £4m and like-for-like net sales are up 20% on last year.

Over the last two years, the business has invested heavily in operations, branding and its supply chain to enable rapid expansion.

Following BGF’s investment, Colin Hughes will join the board as a non-executive director, bringing additional experience in the food retail sector.

Hughes was previously on the boards of Pret a Manger and EAT, where he was involved in rolling out 100 new sites.

Andy Gregory, BGF’s regional director for the North of England, commented: “Barburrito has a fantastic product, a strong vibrant brand, ambitious management and an excellent operational platform. These are strong foundations for growth and the basis for our decision to invest.

“Having established the UK’s first ever burrito bar, Morgan and Paul have successfully pioneered fresh Mexican food in the UK and it is fast becoming one of the most popular parts of the food and drink market.

“The business has demonstrated strong trading in the North West and is now well placed to bring its winning formula to the London market.

“This is where our capital and expertise comes in and we look forward to working with the team as we move into their next stage of growth.

“This is the first investment led by our Manchester office and as such represents a significant landmark for BGF.

“We are seeing a strong pipeline of investment opportunities across the North of England, a clear indication that businesses here are recognising the value that a supportive equity investor can bring to the table.”

Morgan Davies, joint MD and founder of Barburrito, added: “We have made great progress since starting as a single site in 2005.

“In the last two years we have opened three new stores and doubled the size of the business. We believe that the time is right to roll out our award winning formula to a national customer base and we knew that we needed additional funding to achieve this.

“We are excited about partnering with BGF to take Barburrito to the masses. It was important for us to find the right partner, an investor that is able to offer more than just money.

“BGF has demonstrated that they not only share our enthusiasm for the sector but can bring valuable advice, expertise and high level contacts to the table.”

Ward Griffiths Associates will assist in identifying and selecting sites for the expansion programme.

Barburrito was introduced to BGF by Corporate Finance and Investment business Seneca Partners.

Paul Kilpatrick, joint MD and founder of Barburrito, also commented: “Our first burrito bar was opened in the UK in Piccadilly Gardens, Manchester and we have since opened a further five stores in the North West of England.

“We have a proven concept, an excellent product and a strong brand. BGF’s capital will help support our expansion into London and the rest of the UK.

“We are hugely excited about the opportunities that lie ahead for us in this rapidly growing sector.

“BGF’s investment will allow us to expand into the London market and create approximately 250 new jobs.

“We are actively looking for high density locations, populated by office workers, shoppers, tourists and students with a busy lunch and some weekend trade.”

This was posted in Bdaily's Members' News section by Tom Keighley .