Fundamentals of Business

A LITTLE BIT ABOUT US

Little Chef has been a sign of good food for over 40 years, with restaurants right across the UK.

WHERE IT ALL BEGAN the first Little Chef opened in Reading in 1958, the same year Britain got its very first motorway. From 11 seats, we've grown to become one of the UK's favourite roadside restaurants.
TODAY'S LITTLE CHEF we have 192 Little Chef restaurants, from Scotland down to Cornwall. You'll be in good company; over 20 million people eat with us every year.
ANYTHING BUT LITTLE each year we welcome over 20 million customers, serving them around:
√ 10 million cups of tea
√ 12 million rashers of bacon
√ 13 million eggs
√ 13 million sausages

Where did Little Chef take a wrong turning?

(11 January 2007 00:00)
When Little Chef hit the buffers last week, financial experts blamed the high rents of a bullish sale and leaseback programme. As Tom Bill reports, those close to the deal believe the problems were fundamental.
When Little Chef went into administration last Wednesday, it sparked nostalgic tales of all day fry ups and blueberry pancakes. It also had financial experts muttering "I told you so" under their breath.
Eyebrows were first raised in October 2005, when the 234 strong roadside chain was sold to restaurateurs Lawrence Wosskow and Simon Heath for £52m - a high price for a tired brand, according to many.

When Wosskow and Heath cleared the £52m debt with the sale and leaseback of 65 Little Chef sites to Israeli property group Arazim for £60m four months later, doubters wondered whether the rent repayments would overstretch them.
But those close to the Arazim deal believe it was operational blunders rather than the rental burden that led to its collapse. One source close to the talks said: "The deal stacked up on paper. If Little Chef had continued trading as it was or even if sales had fallen off a bit, they would have been able to meet the repayments".

Two Two for for one dea deals ls
The source said a decision to slash prices and offer two for one deals in an attempt to lure more people out of their cars was at the root of the problem. "It didn't make more people stop and it simply cut the amount of money going through the tills." The cost of a full English breakfast was cut from £9 to £4 while a plate of fish and chips with tea dropped from £9.48 to £4.99. At the time a Little Chef spokeswoman said:
Problem
Cash flow, cutting price must reflect contribution margins, it can't go below the margin.