ESC.L Share News (ESC)

(Sharecast News) - Escape room-based leisure operator Escape Hunt has acquired its Middle East master franchise partner, Escape Hunt Entertainment (EHE), subject to the formal registration of the sale, expected on 22 October.
The AIM-traded firm said the Dubai site was reopening immediately, under its control.

It said EHE owns and operates an escape room site in the Galleria Mall in Dubai, and also has sub-franchise relationships for four sites in the region.

As a result, the Dubai site would become an 'owner-managed' site, alongside its existing estate in the UK, and the sub-franchisees would become direct franchisees.

Together with Basingstoke and Cheltenham, which were currently in build, it took the total number of owner-managed sites to 13, with a further two sites in legals.

The management team from EHE had been retained, and would continue to run the business in the area.

Escape Hunt said the acquisition was expected to "significantly increase" the contribution from the region.

In 2019, the Dubai site had turnover of around £0.49m, with the firm expecting to run the site on similar operating metrics to a UK site.

In addition, with the Dubai site becoming a 100% beneficially-owned subsidiary, Escape Hunt's revenue share from the Middle East sub-franchisee network would rise from 5% to 10%.

In light of the Covid-19 pandemic, the Middle East regional sub-franchisee network was being reviewed, and sites would either re-open and remain part of the network, or new partners would be sought to expand the regional network in time, the board explained.

"We are excited about the prospects for the region and believe the Dubai site in particular has the potential to deliver very attractive returns from a high quality, attractive venue in the Galleria Mall as was being demonstrated prior to the Covid-19 pandemic," said chief executive officer Richard Harpham.

"We are delighted that Abdulwahab Bahrawi and his team are now part of the group, and expect them to play an increasingly prominent role in driving our international franchise business in the future."

At 1328 BST, shares in Escape Hunt were up 6.03% at 8.8p.