Pret A Manger dumps US franchise agreement after just two years
Pret A Manger has dumped the franchise agreement which it had launched to expand in the US after just two years, its latest accounts revealed.
The coffee chain formed a joint venture, known as Empire JointStar, with its franchise operator Dallas Holdings in October 2023, in a bid to accelerate its expansion in the US.
But Pret has since torn up this deal after sales slumped at the franchised sites. It has now bought back these stores in a bid to “grow and expand the brand”.
The agreement had seen Dallas operate around 50 Pret sites – in locations like New York, Philadelphia and Washington DC – with the aim of opening 10 more by this year.
Pret reported £1.2bn in system sales – which includes its company-owned and franchised shops – in the year to January, flat on the previous year, while revenue dipped by two per cent to £854m.
The company said its sales jumped by 2.7 per cent, which it put down to the expansion of its store footprint and a boost to sales in the UK.
The firm said its sales growth was held back by the performance of the franchise agreement.
“The growth was driven primarily by expansion of the global shop estate and higher shop sales in the UK, partially offset by the performance of Empire JointStar,” it said.
The firm terminated its partnership with Dallas in October 2025, it said, and regained the stores that had been operated by its franchise partner. Sales at these stores have risen since the deal was torn up, it is understood.
Dallas Holdings, which acquires and runs cafe and fast food outlets, was set up in 2018 by the Thakrar family, who sold their petrol forecourt business five years ago. Dallas remains a partner to Pret in other markets including in the UK.
Pret slashes prices to drive footfall
Pret’s accounts revealed its average headcount at its directly-operated stores fell by eight per cent to 7,531 workers, as of January 2026.
The coffee chain said its number of directly-employed workers changes frequently because it frequently offloads stores – and headcount – to franchisees.
Pret said its performance was underpinned by its commitment to cutting prices and responding to customer feedback.
The firm said in its accounts: “Pret’s ongoing commitment to never standing still and always delivering to evolving customer needs saw focus on better value for all customers.”
The coffee chain cut the price of its Arabica filter coffee to 99p in July 2024, and slashed prices elsewhere on croissants, egg sandwiches and tuna baguettes.
Pret said it has seen a “strong” start to this year, with UK sales up eight per cent in the first four months of 2026 as it sees higher customer footfall.
The coffee firm is “relentlessly” focussed on its offer of fresh food and barista-made drinks despite a “challenging macroeconomic environment,” it said.
Pret said it is expanding its store footprint globally and in the UK, with a focus on transport hubs and drive-through locations.
The firm currently holds £553m in debt, up five per cent from the previous year, and its debt servicing costs fell by 24 per cent to £70m. Last year, Pret pushed back the terms of its £625m loan facilities to March 2029.
Pret ‘encouraged’ by start to year
Pano Christou, Pret’s chief executive, said: “We are encouraged by our start to 2026, particularly as more customers are choosing Pret despite the financial pressure many households continue to face.
“These results give us confidence that when we stay focused on the customer, we can continue to win the hearts and minds of Pret fans in the UK and around the world.”
The coffee firm faces a £1m animal welfare campaign after it delayed its promise to phase out the use of “frankenchickens” in its food, it emerged earlier this week.
Animal welfare organisation Anima said it will plaster posters and billboards across the London Underground in a bid to draw attention to the practice, by which fast-growing breeds of chickens are favoured by food producers.
A Pret spokesperson told The Times: “We are disappointed that this campaign group have chosen to target one of the few businesses that remains signed up to the Better Chicken Commitment.
“By targeting us, these activists are sending a signal that businesses that do the right thing will be criticised more than those who give up on higher welfare chicken.”
Pret a Manger was founded in London in 1983 and was bought by European investment group JAB for £1.5bn in 2018.