‘Chain restaurants go bust because they charge too much for bad food’
Daniel Woolfson
5 min read
David Page: ‘Wagamama’s Andy Hornby is a lovely guy, but he’s never been a waiter or a chef’ - Heathcliff O'Malley
Chain restaurants are going out of business because they are overcharging and for “not very good” food, the boss of the pizza specialist Franco Manca has said.
A swathe of mid-market restaurant chains have collapsed since the pandemic, as margins were eroded by the rising cost of wages, energy and ingredients, and the cost of living crisis caused diners to cut back.
He said: “The menus are too big. They’re trying to do many too many things. You need a skilled kitchen which costs money. At £30 per head and not very good, that’s the problem sector and that’s where they’re all going bust.”
Many former high street staples such as Byron, Prezzo and Le Pain Quotidien have run into trouble and been forced to close sites. It is a far cry from the casual dining boom of the 2010s, when chain restaurants were expanding rapidly, fuelled by private equity backers and cheap debt.
He said: “Our maxim at the beginning was that we would be 30pc cheaper than anybody else. Obviously margins are under pressure because of the economy but customers are still coming in because of the value in the product.
“You’d struggle to spend more than £10, we’re cheaper than a Pret A Manger.”
He claimed Franco Manca was able to keep down costs by cutting out the middleman and sourcing directly from farmers in Italy.
“There’s no middleman in Italy and there’s no middleman in England taking 2pc or 3pc,” he said. “So we go to the grower, and... we go to the people making the cheese, the chickens.
“We try to find out who is in charge of the production and what the quality control is. We buy direct from them and then we arrange the transportation.”
Mr Page said Franco Manca and its sister chain, The Real Greek, had been able to take advantage of rivals closing and secure cheaper rents.
“I’m afraid to say we have done and we are taking advantage of other businesses going under,” he said. “My best ever site in the UK is a Real Greek where it cost us £200k to convert from a Carluccio’s and the landlord gave us £200k. That is my best ever.”
It comes as Andy Hornby, the boss of Wagamama’s parent company, The Restaurant Group, told The Telegraph last year he did not believe casual dining would ever recover to its pre-pandemic size.
Asked if he agreed with Mr Hornby’s comments, Mr Page said: “He’s a lovely guy. But he’s never been a waiter or a chef. I started washing up.”
Long before he ran Franco Manca and The Real Greek, Mr Page was credited with helping turn Pizza Express into the high street name it is today.
He started his career as a dishwasher in one of the business’ restaurants in the early 1970s and worked his way up, waiting on tables, making pizzas and eventually running 14 of his own restaurants.
He later became chief executive of Pizza Express in the UK, having played a senior role in floating it in 1993. The chain expanded rapidly, winning over the British middle classes and helping to popularise pizza nationwide.
Mr Page left Pizza Express in 2003 when it was taken private by private equity.
‘The landlord of a former Carluccio’s gave us £200k to convert to The Real Greek. That is my best deal ever’ - Franco Manca
He bought a majority stake in Franco Manca, which had grown from an independent pizzeria in London’s Brixton, for £27.5m in 2015. Since then it has expanded steadily and now has 70 restaurants across the UK.
However, his comments come as Franco Manca and The Real Greek are now facing a future under new ownership. The Fulham Shore – the parent company of both chains – has been snapped up by the Tokyo-listed food company Toridoll in a £93m deal.
The acquisition, which completed this week, ends The Fulham Shore’s run as a public company on the Alternative Investments Market (AIM).
It has netted Mr Page, who held over 13pc of its shares, a payday of around £11.8m, according to reports. He will remain with the business in an advisory capacity.
Toridoll, which runs the 11-site noodle chain Marugame in the UK, wants to grow Franco Manca and The Real Greek to around 200 restaurants combined, roughly doubling the group’s current size.
The sale to Toridoll, at 14.5p per share, valued The Fulham Shore at a premium of around 35pc. Publicly traded hospitality companies have faced a rough ride over recent months as share prices fell amid broad concerns about the economic situation facing the hospitality industry.
“[Toridoll] thought they saw more value than the public market did in London,” Mr Page said.
Asked if he shares worries that London is becoming a less appealing place to list companies, he said: “As far as I’m concerned, I shouldn’t be rubbishing English public markets because I’ve made lots of money each time through flotations and running businesses and selling on the public market.
“So it would be mealy mouthed for me... But that is in the past. London has always been a very attractive place, but I think other people may be catching up in terms of competitiveness.”
