Burger chain Five Guys flips debt with £185m refinancing

The burger chain Five Guys will this week announce a £185m refinancing as it seeks to expand its European estate in a challenging climate for restaurant operators.

Sky News understands that Five Guys, which launched in the UK in 2013, has landed a new five-year debt deal with lenders including Britain's major high street banks. Sources said the agreement was likely to be announced on Wednesday.

Money latest: Economists issue warning as government borrowing soars Five Guys trades from nearly 180 sites in the UK, employing roughly 5,500 people. It also operates under the same corporate ownership structure in France, Germany and Spain, with its European operations in total employing about 9,000 people.

The European business is a 50-50 joint venture between Freston Ventures - the investment vehicle of Sir Charles Dunstone, co-founder of The Carphone Warehouse - and the Murrell family which founded Five Guys in the US. It is now expected to seek to open a larger number of drive-thru restaurants in the UK and elsewhere in Europe.

In a statement issued to Sky News, John Eckbert, Five Guys Europe's chief executive, said: "Securing additional debt capital at a more favourable rate in today's market is a significant accomplishment. "This £185m refinancing transaction is a testament to the strength of the Five Guys brand and our successful operational performance.

"The latest capital injection will be instrumental in accelerating our expansion strategy." The deal comes as hospitality groups warn of an increasing challenge to survive following tax increases announced in Rachel Reeves's Budget last autumn, with chains such as Cote now exploring urgent sale processes in a bid to secure new investment..