Crosstown doughnut in front of foodtruck  2100x1400

Source: Crosstown

Doughnut specialist Crosstown has secured new investment to help support its growth ambitions following its acquisition by franchise operator Karali Snacks Ltd.

Made via a pre-pack administration deal for an undisclosed fee, the transaction included the business and assets of the brand’s parent company Crosstown Dough Ltd including 27 operating locations comprising stores, market units, kiosks, concessions, and trucks. Three remaining Crosstown stores – in Bath, Bristol, and just off Fenchurch Street in London – were not included in the sale and have subsequently been closed.

A total of 140 staff at Crosstown including its leadership team have been transferred to Karali Snacks, which is part of the family-owned Karali Group – described as a diversified, multi-national hospitality and real estate platform operating franchises in the fast-food, casual dining, and hospitality sectors.

Led by founder, CEO, and chairman Salim Janmohamed, Karali Group previously operated Wimpy franchises in the UK as well as being, at one point, Britain’s largest independent Burger King franchisee prior to selling its 74 stores to the fast-food restaurant chain’s UK arm in 2022.

“We’re delighted to start the next chapter for Crosstown,” commented CEO Howard Ebison, who is to continue leading the brand, which specialises in artisan sourdough doughnuts, small batch ice-cream, and specialty coffee. “Since we launched 10 years ago, the fantastic team has created a completely unique proposition in bakery. Crosstown has become a destination for food and flavour, both in store and online.

“The Karali Group brings a wealth of experience and an exceptional track record growing hospitality brands. Their investment is testament to the strength of the Crosstown brand, the commitment of our teams and the loyalty of our customers,” added Ebison.

Crosstown's store in Cambridge  2100x1400

Source: Crosstown

Crosstown’s Cambridge store is one of the locations acquired by Karali Snacks Ltd

Back in April, Crosstown was reported to be working with Interpath Advisory to explore investment options that could support its continued operations and expansion in the UK and beyond. “The team at Crosstown has a great concept that has gained an enviable foothold in the market,” noted Sam Birchall, head of Special Situations M&A at Interpath Advisory. “This transaction will enable the team to build upon its network of retail outlets with the investment and support of Karali Snacks. We wish the team all the best for the future.”

Janmohamed’s son Karim, who serves as the co-CEO of Karali Group in North America as well as group head of investments and strategy, said the firm was delighted to get the acquisition over the line. Karali has been advised by London-based solicitors Freeths. 

Janmohamed added that he was excited about the opportunity to work with the Crosstown team on further developing and enhancing the brand and offering. “The Crosstown brand is synonymous with excellence, innovation and quality in the bakery sector, and we were immediately attracted to the chance to invest and propel the business forward,” he said. “Karali Snacks, a division of the Karali Group, will manage the investment in Crosstown as the Karali Group furthers its investment strategy across the retail, consumer, leisure and real estate spaces.”