CHESHIRE restaurant entrepreneur Tim Bacon has been forced to put expansion plans for his Gusto and Blackhouse Grill brands on hold.

The credit crunch means plans to open 40 new outlets over the next five years have been scrapped.

In addition, Mr Bacon’s joint venture investor, The Restaurant Group, wants to sell its stake in Mr Bacon’s Living Ventures company, which operates 14 existing Gusto and Blackhouse Grills.

The Restaurant Group owns 350 outlets of its own, including Frankie & Benny’s and Garfunkels.

Mr Bacon said: "The current businesses are holding up well, but in the circumstances the business model isn't right, although I think that will change in time.

"I don't want to get involved with venture capitalists and see them and the banks take out all the value leaving little for shareholders."

The Restaurant Group has a 38% stake in Living Ventures. Mr Bacon adds: "We'll buy them out but only when the time is right for us and on our terms."

In the meantime, Mr Bacon and his business partner, Jeremy Roberts, plan to use their own funds to snap up individual restaurant businesses.

It is thought the first will be a £3m deal in Manchester, though these won’t be converted to Gusto or Blackhouse Grills. Living Ventures sold the Living Room bar chain to Ultimate Leisure Group – now Premium Bars and Restaurants – in 2007 for £28m.

“The big opportunity is going to come in January or February,” he said. “No matter what, people will trade through Christmas because you see that natural increase.

“There will be companies in trouble from a debt point of view. We’re looking for that opportunity, which will be a business in distress, that we’re looking to come in and turn around,” he says.

The Cheshire-based Australian has a track record of rolling out brands for sale, including Italian chain Est Est Est.

barry.turnbull