As many operators reign in their portfolios and hit pause on expansion plans, Thai chain Giggling Squid is among the few continuing to grow, taking advantage of an increased willingness to negotiate amongst landlords.
Giggling Squid has expanded to 29 sites, with six openings since March and one more planned in 2018. Its financials have grown in step with its estate and turnover for the year ending 31 March 2018 was up 29% to £23.7m, with EBITDA before exceptional costs 54% up on the previous year at £3.28m.
Co-founder Andy Laurillard, who formed the group with wife Pranee, told The Caterer: "I think it should get as big as it can get without losing touch with keeping its customers happy and banging out some excellent Thai food every day. I don't know how big that could be. We'll keep growing until we feel we're not keeping customers happy any more.
"There's quite a lot for sale at the moment but not a lot of people buying, so it's quite a good time to pick up attractive deals.
"About 80% to 90% of our estate is national operators' cast-offs. Landlords have got less choice of tenants, so we have more leverage in the discussions than we did before. I think also we're quite an attractive user, we're a bit different than any other occupant of these sort of premises, landlords like having someone interesting and smart in their building."
The group is becoming a familiar site amongst Britain's market towns and commuter belts, but has only crept inside the M25 reaching as far as Esher, Kingston upon Thames and Wimbledon. Laurillard has previously said that he would not be prepared to enter bidding wars for inflated sites and has a clear eye on the demographics in which his restaurants have the best chance of success - 100 locations are on his "not crazy" list. Arguably his only misstep so far was a site in Crawley, sold before it could become loss-making.
He added: "We're learning from our own mistakes all the time, learning loads from them and learning from others. I've certainly looked at some of the rents people have paid - the landlord comes in and says I want a 10% increase on what Jamie's was paying and you offer 40% less and he storms off in a huff and then comes back to us realising his building is not worth as much as he thought it was. There's a bit of a correction going on in terms of rental expectation."
Giggling Squid's expansion has been helped by a £6.4m funding injection from the Business Growth Fund, received in 2015, but Laurillard said this actually signalled a pause in their plans as the private equity firm - who he describes as "pussy cats" - told them to increase costs, put more resources into their head office and ensure structures were in place to maintain quality.
He explained: "Right from the design of the restaurant onward, we try to keep the standards up. My wife still does all of the interior design work herself right down to painting the walls and doing decorations by hand. She's done all of that and that makes sure that the new ideas come in; there's no cookie cutter design brought in from a warehouse. It's all bespoke.
"We've obviously got great teams of people and are extremely good employers of Thai chefs. We spend a lot of time on training the chefs and monitoring and really look after them, we're exceptionally good employers. Good pay, tips, very long holidays, bonuses, lots of welfare support; we accommodate 200 people and in return we get great food from them and that's why our customers like us and keep coming back."