itsu is concentrating its expansion on transport hubs, the route by which it also recruits franchise partners. The chain reported turnover of £123.7 million for the year, up 2.8%, narrowed its loss, and took two former franchise shops in Aberdeen and Edinburgh back into the company’s hands, a reminder that the franchise route runs in both directions.
itsu‘s managing director told the trade this week that the business is on track to finish the year in a stronger position than last, with expansion focused on transport hubs. The chain appointed joint managing directors in August: Greg Thorp, group chief financial officer since March 2022, who keeps that role, and Tom Springett, previously property director. Clive Schlee moved from chief executive of the restaurant business to a seat on the board, and said the company was glad to be able to hire internally.
Where the franchise route actually runs
The transport hub focus is not only a property strategy, it is the shape of the franchise offer. itsu’s own franchising page states that it is looking for franchise partners in high-footfall travel hub sites, and asks anyone holding a prime spot in a busy travel area to come forward. The page puts the estate at 77 shops and describes the model in terms of a high number of transactions at a mid-market average transaction value, with simple operations and affordable capital expenditure. Capital requirements vary widely across the sector, as our guide to what it costs to open a franchise in the UK sets out. The condition attached to it is the important one: the partner brings the site.
Good to know
itsu franchises in the UK, but only into travel hubs, and the applicant is expected to already control the site. That puts it in the same bracket as Greggs and KFC, where the model is genuinely a franchise and the gate is what you already hold rather than what you can raise. A reader with a high street unit and capital is not the audience for this one, and our guide on being the right candidate to open a franchise works through how much the entry criteria differ between networks. Brands with open recruitment sit among the restaurant franchises recruiting in the UK.
Two Scottish shops back in company hands
The same results that set out the expansion also record the opposite move. Over the year itsu re-acquired former franchise operations in Aberdeen and Edinburgh, bringing two Scottish shops back under company management. Alongside that it upgraded more than 20 shops, opened a flagship at Manchester’s Trafford Centre, and added tills and repositioned grab-and-go chillers to move queues faster. Networks are usually reported moving in one direction, towards franchising, and a franchisor buying units back is the less-covered half of the same cycle, one the distinction between company-operated and franchised sites explains, as our guide to how franchising works in the UK sets out.
The results behind the expansion
Turnover reached £123.7 million, up 2.8%, with adjusted EBITDA of £4.1 million against £3.9 million, and the net loss narrowed to £5.8 million from £6.8 million. Cash stood at £2.7 million and net liabilities at £17.3 million. The company pointed to inflation, interest rates and policy-driven cost increases, naming changes to employer National Insurance contributions, which apply UK-wide, pressures that bear on the fast food franchises recruiting in the UK as much as on company-operated chains. Julian Metcalfe, chief executive of itsu, pointed to investment in the operating model and the Academy, and said it positions the business “to drive like-for-like transaction growth and strengthen unit economics”.
What comes next
The figure that will show whether the transport hub strategy is working is the shop count in travel sites specifically, which itsu does not currently break out, and whether any of that growth arrives through franchise partners rather than company openings. The Scottish re-acquisitions make that split worth following: a network can grow its estate and shrink its franchised share in the same year. The joint managing directors took their roles in August, so the current financial year is the first full one they will report on. Operators weighing a site of their own can compare franchise opportunities across the UK.
