For what seemed like a dog’s age, there was little that restaurant franchiser Famous Brands could do wrong. Its strong brands, unrivalled supply chain, enviable manufacturing operations and handsome dividends made it first choice in the sector. Then Gourmet Burger Kitchen (GBK) happened. The ill-fated acquisition of the UK chain of nearly 100 restaurants has cast a pall over the group’s solid track record. Famous Brands bought GBK for a debt-funded £120m in 2016, shortly after the UK voted to leave the EU. Very simply, GBK has not delivered the desired returns. It’s starting to affect Famous Brands’ SA cash flows and shareholders have kissed dividends goodbye in the past two years. The business has suffered because of Brexit’s blow to consumer confidence, the rise of online food delivery and higher property rates in the UK. Another thing is that competition in the premium-burger segment is particularly aggressive. Burgers are a highly commoditised food offering — there are at least ...

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