Wendy’s decision to pull out of the UK has made the burger chain more than £1.5m on selling the leaseholds to its restaurants.
The results of the sale of Wendy’s restaurants shows how strong the competition is for sites in central London, especially when fast food restaurants are looking for new outlets.
McDonald’s paid about £750,000 to take over Wendy’s London sites in Shaftesbury Avenue and York Way, near King’s Cross. Wendy’s received another £750,000 for returning its flagship restaurant in Oxford Street to landlord Norwich Union, which then leased the site to McDonald’s.
Wendy’s had 10 leaseholds in Britain. Rents are generally set for five years, so when a rental agreement is ended early the tenant may be given a pay-out if the property market is booming. If the market slumps and there is little demand for property, the tenant may have to make an extra payment to the landlord or the new tenants
The chain’s Briggate restaurant in Leeds was also taken over by McDonald’s, for an undisclosed sum. Wendy’s was paid £50,000 for assigning the lease of its Croydon branch to sports and camping equipment chain The Outdoor Group.
The chain’s Watford branch went to travel agent First Choice. In west London, KFC took over Wendy’s Acton branch and Greggs took over its Hounslow restaurant.
Wendy’s paid undisclosed sums to the new tenants, as well as a year’s rent – about £89,000 – to return its branch in Uxbridge, Middlesex, to the landlord.
Wendy’s was paid an undisclosed sum to return its restaurant in Wood Green, north London, to its landlord. The building has since been leased to the clothes shop Next.
Competition was fierce for Wendy’s restaurants, said estate agent Andrew Smith, of Blair Kirkman. “When you get players like Burger King and KFC in the running, there’s lots of competition to gain the market share.
“Speed was especially important here – Wendy’s was pulling out of the UK completely, so it wanted companies that had the financial clout to move very quickly. There was interest from independents, but the big fast food chains had the advantage.”
Wendy’s blamed high property and operating costs when it announced the closure of its company-operated restaurants in Britain last October. It still has about 40 franchised restaurants in the UK, other parts of Europe and the Middle East.
by Linley Boniface