Barburrito to triple in size with BGF cash

BARBURRITO, the fresh, Mexican-themed fast food burrito concept, is embarking on a major roll-out plan after sealing a £3.25m investment deal from the Business Growth Fund.

Fouded by Manchester-based entrepreneurs Morgan Davies and Paul Kilpatrick, the six-strong chain will now expand in and around London, growing to around 18 sites over the next four years and creating 250 jobs.

The investment, for a signiificant minority stake, is the Business Growth Fund’s first in the North West and fifth overall.

Barburrito was founded in 2005 and has an annual turnover of £4m. Its like-for-like turnover is up 20% on 2011

It currently operates at Piccadilly Gardens and Deansgate in Manchester city centre, two sites in the Trafford Centre, The Galleria, Liverpool One and The Headrow, Leeds.

The founders were the first open a burrito bar in the UK. Before founding Barburrito, they successfully developed and sold an upmarket single-site takeaway business, Globe Delivery.

Three years ago they teamed up with Cheshire-based industry veteran Richard O Sullivan, the co-founder of Millie’s Cookies and the current chairman of Boost Juice Bars UK, who has supported the rapid growth of the business as non-executive chairman. He is remaining in the role.

Following BGF’s investment, former EAT and Pret A Manger director Colin Hughes will join the board as a non-executive director, bringing additional experience in the food retail sector.
 
Andy Gregory, BGF’s regional director for the North said: “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.”

Mr Gregory hailed the deal – the BGF Manchester office’s first as a “significant landmark” for the fund.

He added: “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, commented: “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.”

Paul Kilpatrick, added: “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.”

The business will be assisted by Ward Griffiths Associates to identify and select sites. Barburrito was introduced to BGF by corporate finance and investment business Seneca Partners.

Legal advisers to BGF was Pinsent Masons and financial due diligence was undertaken by Grant Thornton.   Existing shareholders were advised by Freeth Cartwright LLP and Hill Dickinson.