The sector saw 30 deals in 2024/25, up from 16 in 2023/24, according to analysis from Southeast law firm TWM Solicitors.
It attributes the growth in activity to a combination of lower interest rates, improving investor confidence, and falling commercial rents, which it says has created a favourable environment for mergers and acquisitions in the restaurant sector. The Bank of England lowered the base interest rate to 4% in August 2025.
“The near doubling of takeover deals is a strong vote of confidence in the UK restaurant sector. We’re seeing a wave of consolidation, particularly at the lower end of the market, as buyers move quickly to acquire competitively priced businesses,” says David Powell, partner and head of the corporate and commercial team at TWM Solicitors.
“Falling commercial rents in traditionally expensive areas – such as central London – have made acquisitions of restaurants more attractive to buyers. Another factor is that declining equipment costs, which peaked during the pandemic, have made acquisitions more attractive.
“Many restaurant groups also undertook comprehensive post-Covid restructuring, including closing loss-making sites and streamlining menus, which has left them leaner and more profitable.”
Deals in the past year include Busaba Eathai, which was acquired in a pre-pack sale to Seaco Investments, and TGI Fridays, which was sold to Breal Capital and Calveton.
The surge in M&A activity comes despite challenges to the sector such as the recent rise in employer National Insurance Contributions (NICs) and is reflected in improved financial performance across the sector. Recent research from accountancy group UHY Hacker Young found that profits at the UK’s biggest restaurant groups rose 18% over the past year, to £365m this year, up from £308m in 2024. Turnover, meanwhile, rose to £12.9bn from £10.8bn last year, reflecting a 19% rise.
“Many of these restaurant groups are high quality businesses with healthy margins. Buyers are spotting opportunities to acquire potentially undervalued businesses that can be scaled with the right investment,” adds Powell.
“With footfall steadily improving post-pandemic, brick-and-mortar restaurants are once again seen as attractive investments.”
“For some buyers, consolidation also brings the operational benefits of spreading payroll and overheads across a larger portfolio.”