SAN DIEGO & LAKE FOREST, Calif.–(BUSINESS WIRE)–Jack in the Box Inc. (NASDAQ: JACK), one of the nation’s leading QSR chains, and Del Taco Restaurants, Inc. (NASDAQ: TACO), the nation’s second largest Mexican QSR chain by number of restaurants, today announced that the companies have entered into a definitive agreement pursuant to which Jack in the Box will acquire Del Taco for $12.51 per share in cash in a transaction valued at approximately $575 million, including existing debt. While this price per share offers an attractive premium to Del Taco shareholders, Jack in the Box estimates that the transaction values Del Taco at a synergy adjusted multiple of approximately 7.6x trailing twelve months Adjusted EBITDA.
Founded in 1964, Del Taco serves more than three million guests each week at its approximately 600 restaurants across 16 states. 99% of Del Taco restaurants feature a drive-thru, helping to achieve strong off-premise sales and a diversified daypart mix. Jack in the Box and Del Taco will have more than 2,800 restaurants spanning 25 states with similar guest profiles, menu offerings and company cultures – both priding themselves on serving guests with unique variety, quality, innovation and value. Together, the companies will create a stronger QSR player with greater scale and the ability to enhance the guest experience while pursuing profitable growth.
“We are thrilled to welcome Del Taco, a beloved brand and proven regional winner, to the Jack in the Box family,” said Darin Harris, CEO of Jack in the Box. “This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities. Together, Jack in the Box and Del Taco will benefit from a stronger financial model, gaining greater scale to invest in digital and technology capabilities, and unit growth for both brands. This acquisition fits squarely in our strategic pillars and helps us create new opportunities for the franchisees, team members and guests of both brands.”
Mr. Harris continued, “Del Taco has a loyal, passionate guest base and a strong operating model, and we believe that we can leverage our infrastructure, experience refranchising, and development strategy to support Del Taco’s growth plans and expand Del Taco’s footprint. We can’t wait to welcome the Del Taco team members and franchisees to the Jack family!”
David Beshay, a Jack in the Box franchisee and operator of 210+ restaurants, added, “I couldn’t be happier about the opportunity that this transaction offers to the franchisees of these two amazing brands. I believe the Del Taco brand will fit hand in glove with ours, and further enhance the strong franchise and guest-focused culture we have worked so hard to develop at Jack in the Box. We are excited about the potential to open Del Taco restaurants, helping the company expand these two beloved brands.”
John D. Cappasola, Jr., President and CEO of Del Taco, said, “We are excited to have found a partner in Jack in the Box that shares our vision for the future and has the QSR expertise to further accelerate Del Taco’s growth. In recent years, we have uniquely positioned Del Taco as a leader in the growing Mexican QSR category, expanded our digital capabilities to enhance consumer convenience and focused on growing the brand through franchising, resulting in eight consecutive years of franchise same store sales growth and an accelerating new unit pipeline.”
Mr. Cappasola, Jr. continued, “We expect this transaction will provide Del Taco with the scale, complementary capabilities and opportunity to become even stronger partners to our franchisees and support their ability to drive substantial growth in our core and emerging markets. On behalf of Del Taco Restaurants, Inc. Board of Directors, we’re confident the agreement delivers immediate value to Del Taco shareholders and will greatly benefit our brand, team members, franchisees and loyal guests for many years to come.”
Brent Veach, a Del Taco franchisee and operator of 50+ restaurants, shared, “Del Taco and Jack in the Box are two iconic brands that both represent a tremendous business opportunity for existing and new franchisees. I am excited how this new larger organization can provide operating cost synergies and further accelerate franchise growth through enhanced support, additional resources and shared real estate knowledge. We are excited to join the Jack in the Box family and assist in growing both amazing brands.”
Leonard Green & Partners, an early investor in Shake Shack, has purchased the majority stake in the fast-growing fast casual from L Catterton, the company announced Tuesday.
By Heather Lalley on Nov. 30, 2021
Fast-growing fast-casual concept Velvet Taco has a new owner in Leonard Green & Partners, which acquired a majority stake in the chain from L Catterton, the company announced Tuesday.
L Catterton, which has had a relationship with Velvet Taco since 2016, will remain an investor in the brand along with the chain’s founder, FB Society (formerly Front Burner Restaurants).
“L Catterton has been a tremendous partner through this chapter of our growth, and we are excited to have them remain a part of the Velvet Taco family going forward,” Clay Dover, the chain’s president and CEO, said in a statement.
Details of the transaction were not disclosed.
The majority stake from Leonard Green & Partners will aid the chain “as we embark on this next phase of Velvet Taco’s national expansion.”
Velvet Taco, known for its inventive menu items, has nearly 30 locations in Texas, North Carolina, Georgia, Illinois, Tennessee and Oklahoma. The Dallas-based chain has more than doubled its footprint over the past two years and said it plans to add more than 10 restaurants by the end of next year.
“We are proud of what Velvet Taco has become since we initially invested five years ago,” L Catterton Partner Chris Roberts said in a statement. “We are excited to welcome LGP to the family and look forward to supporting Clay and the Velvet Taco team as they bring their unique concept to more and more guests across the country.”
Private equity firm Leonard Green & Partners is currently an investor in Union Square Hospitality Group and Zaxby’s, as well as a number of retailers and other companies. The firm was an early backer of Shake Shack.
Velvet Taco was founded in 2011 by former Front Burner Restaurants CEO Randy DeWitt.
The concept’s menu highlights a creative Weekly Taco Feature, which varies by restaurant. A recent offering was a Turducken taco with roast turkey, duck gravy, chicken skin, warm herbed goat cheese potato salad, cranberry sauce and micro celery on a flour tortilla.
Velvet Taco’s growth has been fueled by its unconventional real estate strategy, which allows it to open restaurants in diverse locations such as former gas stations and previous chain locations.
“It’s not a cookie-cutter brand,” Dover told Restaurant Business in April.
The chain recently added some new store designs, including order-ahead drive-thrus that were seeing a 25% boost in high-ticket digital orders. The brand is also exploring a prototype without a dining room.
“Velvet Taco has established itself as a leader in the fast-casual restaurant category with its innovative, culinary-driven concept and we believe the company is extremely well-positioned for growth and expansion,” said Evan Hershberg, partner at Leonard Green, in a statement. “We are excited to build on the Company’s significant momentum and strengthen its brand leadership across the U.S.”
SAN DIEGO–(BUSINESS WIRE)–Jack in the Box Inc. (NASDAQ: JACK) announced financial results for the fourth quarter ended October 3, 2021, comprised of growth in systemwide sales, same store sales and earnings per share.
“I am very proud of the execution and determination shown by our outstanding franchisees and corporate team members, continuing to deliver for our guests during a challenging operating environment,” said Darin Harris, Jack in the Box Chief Executive Officer. “We closed the year with strong comps on a two-year basis of +12.3% in Q4, leading us to another record-setting year of store-level profitability — a key element in driving results against our growth strategy in the near future. We continue to focus heavily on making significant progress on our strategic pillars, growth objectives, and unlocking substantial value for JACK shareholders.”
Systemwide sales for the fourth quarter increased 8.6%, or 0.2% when excluding the 53rd week for the purpose of comparison to the prior year, driven by positive results in same store sales and partially offset by a slight decline in net unit growth. Systemwide sales for full year 2021 increased 13.1%, or 11.0% when excluding the 53rd week.
The company had a fourth quarter net store decline of one store, comprised of four store openings and five closures. The five store closures included one company-owned location and four related to early terminations and an agreement expiration. In the fourth quarter, there were development agreements signed for 47 future restaurants, bringing the year-to-date total to 111 future restaurant commitments.
Company-operated same-store sales declined 4.4% in the fourth quarter, with decreases in traffic partially offset by increases in average check. Franchise same-store sales grew 0.6%, with increases in average check; partially offset by a decrease in traffic.
LEBANON, Tenn., Nov. 23, 2021 /PRNewswire/ — Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today reported its financial results for the first quarter of fiscal 2022 ended October 29, 2021.
First Quarter Fiscal 2022 Highlights
- Compared to the first quarter of fiscal 20191, comparable store restaurant sales increased 1.4% and comparable store retail sales increased 17.6%.
- Comparable store off-premise restaurant sales grew 168% compared to the first quarter of 20191 and represented approximately 20% of restaurant sales.
- GAAP operating income in the first quarter was $42.9 million, or 5.5% of total revenue, and adjusted2 operating income was $46.1 million, or 5.9% of total revenue.
- GAAP net income was $33.4 million, or 4.3% of total revenue. EBITDA2 was $71.9 million, or 9.2% of total revenue.
- GAAP earnings per diluted share were $1.41, and adjusted2 earnings per diluted share were $1.52.
- The Company’s Board of Directors declared a quarterly dividend of $1.30 per share on the Company’s common stock, payable on February 1, 2022 to shareholders of record on January 14, 2022.
Commenting on the business, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “I’m pleased with the improvement we saw in our first quarter comparable restaurant sales and the continued strength of our retail sales. The progress we made on staffing and the incredible efforts of our operating teams contributed significantly to our sales results in the first quarter and positioned us well for the important holiday season and our second quarter generally. Although we still face an uncertain business environment, our sales trends give us confidence that we should see further improvement in our comparable store sales in the second quarter. We believe that as our guests return to a more traditional holiday season and look to Cracker Barrel to be a part of their family gatherings and celebrations with friends, our dedicated and talented employees and leadership teams will meet their expectations, whether they visit our retail shops and dining rooms, or enjoy our food at home.”
First Quarter Fiscal 2022 Results
The Company reported total revenue of $784.9 million for the first quarter of fiscal 2022, representing an increase of 21.4% compared to the first quarter of fiscal 2021, and an increase of 7.0% compared to the first quarter of 2019. Cracker Barrel comparable store restaurant and retail sales compared to the first quarter of fiscal 20191 and versus the first quarter of fiscal 2021 were as follows:
First Quarter Ended
First Quarter Ended
Comparable restaurant sales
Comparable retail sales
The Company believes that providing comparable store sales results back to fiscal 2019, which is the most recent full fiscal year that was not impacted by COVID-19, provides a more useful comparison than comparing to COVID-impacted periods.
Global Franchisor Expands Wing Portfolio with Arizona-based Casual Dining Chain
LOS ANGELES, Nov. 22, 2021 (GLOBE NEWSWIRE) — FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) announced today that it has agreed to acquire Native Grill & Wings, an Arizona-based restaurant chain known for its cult-like following and 20 wing flavors that guests can order by the individual wing, for $20 million from Wingtime, LLC, a subsidiary of Cybeck Capital Partners, LLC. Marking FAT Brands’ third chicken wing concept, the acquisition of Native Grill & Wings will be funded with cash from the issuance of new notes from the Company’s securitization facilities and is expected to close in mid-December 2021.
With the acquisition of Native Grill & Wings, FAT Brands will have more than 2,300 franchised and corporate-owned stores around the world with a combined annual system-wide sales of approximately $2.3 billion. The addition of the chicken wing concept, including the new stores due to open and under development, is expected to increase the Company’s post-COVID normalized EBITDA by approximately $3 million in 2022. The Native Grill & Wings transaction follows FAT Brands’ planned acquisition of Fazoli’s announced in early November, and marks the Company’s fourth acquisition in 2021, including Global Franchise Group in July and Twin Peaks in October.
“With the chicken wing sector growing in popularity throughout the pandemic, we knew that we wanted to continue developing our portfolio further into this category by bringing in a brand that would complement our existing wing concepts,” said FAT Brands CEO Andy Wiederhorn. “Native Grill & Wings has been on our radar for some time given its ability to remain nimble and deliver strong system-wide sales growth over the past year. We’re pleased to build off the success established by Dan Chaon, Native brand CEO, and Cybeck Capital Partners, LLC, and we look forward to expanding Native Grill & Wings’ presence into new markets.”
“The Native Grill & Wings system is poised for a breakout to the next level, and FAT Brands has the resources and experience that can take it there. We are pleased to pass the baton to FAT Brands for the benefit of the system,” said Joe O’Hara, Managing Partner of Cybeck Capital Partners, LLC. Native Grill & Wings CEO Dan Chaon commented, “I’ve known the FAT Brands team for quite a while. The franchising experience and operational synergies that they bring to the table can maximize the potential of the Native Grill & Wings brand and our franchisees.”
For FAT Brands Foley & Lardner LLP acted as legal counsel. For Wing Time, LLC Taft Stettinius & Hollister LLP acted as legal counsel.
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets and develops fast casual, casual and polished casual dining restaurant concepts around the world. The Company currently owns 15 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises over 2,100 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
About Native Grill & Wings
Based in Chandler, Arizona, Native Grill & Wings is a family-friendly, polished sports grill with 23 franchised locations throughout Arizona, Illinois, and Texas. Native, as the brand’s legion of fans call it, serves over 20 award-winning wing flavors that guests can order by the individual wing, as well as an extensive menu of pizza, burgers, sandwiches, salads and more. For more information, visit http://nativegrillandwings.com/.
- Sweetgreen begins trading its stock on Thursday with an IPO price per share of $28, according to a press release. The company is selling 13 million shares of Class A common stock, which will net $364 million.
- Stocks will be traded under the symbol “SG” on the New York Stock Exchange and the offering is expected to close on Nov. 22.
- Sweetgreen, which is expected to be valued at nearly $3 billion, becomes the fifth restaurant company to begin trading on the NYSE this year, and will soon be followed by Panera Brands and Fogo De Chao, both of which have submitted initial registration forms with the U.S. Securities and Exchange Commission to go public.
Sweetgreen’s biggest hurdle as a freshly minted public company will be showing it is on a path to profitability. Soon after it filed its initial S-1, Axios reported the fast casual chain has been struggling in the net loss category for the last five years — counter to CEO and Co-founder Jonathan Neman’s claims that Sweetgreen is profitable. The company’s net losses reached a high of $141.2 million in 2020, an increase of 107.9% compared to its losses in 2019. Its adjusted EBITDA margin fell to negative 49% in 2020 compared to negative 17% in 2019.
Sweetgreen explained in its S-1 filing that the 2018 comments made by Neman were actually referring to operating profitability for the third quarter of fiscal 2018 rather than net income under GAAP requirements. It also stated that when it was quoted in the New York Times as having revenue that topped $300 million for fiscal year 2019, that the quote didn’t precisely reflect its revenues, which were actually $274 million for the year.
“Potential investors in this offering should not rely on these prior public statements,” the company said.
Sweetgreen’s restaurant-level margins have been historically profitable and reached 16% in 2019, but that dropped to negative 4% in 2020. The company’s restaurant-level margins have already bounced back, however, reaching 12% as of Sept. 26 year-to-date. Its average unit volumes also are at $2.5 million, which is in line with other fast casual chains like Chipotle.
Sweetgreen plans to reach AUVs of $2.8 million to $3 million as a public company, with restaurant-level profit margins of 18% to 20%, according to the filing. These goals will likely be reached through its prior investments in technology, which the company said is part of its path toward profitability.
“We have not achieved profitability in any fiscal period, in large part because we have consciously invested in our operating and technology foundation,” the company said. “We believe this foundation has positioned us to achieve the above growth strategies, while also implementing restaurant-level efficiencies (such as enhanced labor management, automation, and optimal store layouts) and economies of scale in our supply chain.”
Sweetgreen’s acquisition of Spyce, a restaurant company that uses automated kitchens, is expected to allow Sweetgreen to improve capacity and throughput, which will improve restaurant-level margins, the company said. It is also working to double its footprint, a move that will help the chain expand its customer reach and likely boost revenue.
Profitability may not be a key concern for shareholders, at least in the short-term. DoorDash, for example, launched its IPO at the end of 2020 even though it reported net losses of $667 million for 2019 and a loss of $149 million for the first nine months of 2020. DoorDash initially priced its IPO at $102 per share, but during day one trading, it reached $182 per share. The company’s stock traded at nearly $230 per share on Nov. 17.
CHICAGO, Nov. 18, 2021 (GLOBE NEWSWIRE) — Portillo’s Inc. (“Portillo’s” or the “Company”) (NASDAQ: PTLO), the fast-casual restaurant concept known for its menu of Chicago-style favorites, today reported financial results for the third quarter ended September 26, 2021.
Financial Highlights for the third quarter ended September 26, 2021 vs. Prior Year period:
- Total revenue increased 15.3% to $138.0 million
- Same-restaurant sales increased 6.8%
- Operating income decreased 8.8% to $17.2 million
- Net income decreased 19.4% to $6.5 million
- Adjusted EBITDA* decreased 8.4% to $24.2 million
- Restaurant-Level Adjusted EBITDA* decreased 1.1% to $34.2 million
- Cash and cash equivalents on hand were $49.4 million
*Adjusted EBITDA and Restaurant-Level EBITDA are non-GAAP measures. Please see definitions and the reconciliations of these non-GAAP measures accompanying this release.
Michael Osanloo, President and Chief Executive Officer of Portillo’s, said “Our third quarter results demonstrated the resiliency of our brand as we posted solid top line growth and grew our same restaurant sales by almost 7%. In addition, our ability to drive restaurant-level and adjusted EBITDA margins during the quarter, despite the ongoing labor and commodity challenges that have faced our industry, was a testament to our commitment to becoming a world-class, multi-channel restaurant brand focused on high-performance across all of our channels. As we look ahead, our successful IPO has given us the financial flexibility and improved capital structure to capitalize on the massive white space opportunity to grow Portillo’s throughout the country. Our expansion plan will utilize a two-pronged strategy by aiming to expand our presence in our core market across the Midwest as well as targeting major national markets for opportunistic growth. All in all, we are truly excited to have begun our journey as a public company and we look forward to introducing more guests to our unique menu of unrivaled Chicago street food and all-American favorites that has something truly craveable for everyone.”
Initial Public Offering
On October 25, 2021, the Company successfully completed its initial public offering of Class A common stock at $20.00 per share (“IPO”). The Company issued 23,310,810 shares of the Company’s Class A common stock (including 3,040,540 shares sold to the underwriters pursuant to their overallotment option). The Company received net proceeds from the offering of approximately $429.9 million after underwriter discounts and commissions and offering expenses. The net proceeds from the offering were used to pay the redeemable preferred units in full (including the redemption premium) and all of the borrowings outstanding under our Second Lien Credit Agreement (including any prepayment penalties), as well as the purchase of limited liability company units and shares of Class A common stock from certain pre-IPO investors.
Review of Third Quarter 2021 Financial Results
Revenues for the third quarter ended September 26, 2021 were $138.0 million compared to $119.7 million for the quarter ended September 27, 2020, an increase of $18.3 million or 15.3%. The increase in revenues was primarily attributed to an increase in our average check and the opening of two new restaurants in the fourth quarter of 2020 and three new restaurants during the three quarters ended September 26, 2021. Same-restaurant sales increased 6.8% during the third quarter ended September 26, 2021, which was attributable to an increase in average check of 7.9%, partially offset by a decline in traffic. The higher average check was driven by an increase in menu prices, mix of items sold, and more items per order. For the purpose of calculating same-restaurant sales for September 26, 2021, sales for 60 restaurants were included in the Comparable Restaurant Base versus 55 as of the end of the third quarter of 2020.
Operating income for third quarter ended September 26, 2021 was $17.2 million compared to $18.9 million for the quarter ended September 27, 2020, a decrease of $1.7 million or 8.8%. The decrease in operating income was primarily driven by increases in labor, cost of goods sold, excluding depreciation and amortization, occupancy expenses, other operating expenses, and general and administrative expenses, partially offset by the aforementioned increase in revenues and lower depreciation and amortization. The increase in expenses was driven by the opening of two new restaurants in the fourth quarter of 2020 and three new restaurants during the three quarters ended September 26, 2021. Additionally, expenses were comparatively impacted by continued expansion of our dine-in capacity, an increase in commodity prices (primarily beef), and several incremental labor investments to support our team members, including hourly and salary rate increases, training costs and discretionary bonuses. The incremental labor investments were partially offset by lower staffing levels and increased productivity in our restaurants. The decrease in depreciation and amortization expense was primarily attributable to lower amortization expense from an expiring non-compete agreement.
Net income for the third quarter ended September 26, 2021 was $6.5 million compared to $8.1 million for the quarter ended September 27, 2020, a decrease of $1.6 million or 19.4%. The decrease in net income was primarily due to the factors driving the aforementioned decrease in operating income.
Adjusted EBITDA for the third quarter ended September 26, 2021 was $24.2 million compared to $26.4 million for the quarter ended September 27, 2020, a decrease of $2.2 million or 8.4%.
Restaurant-level Adjusted EBITDA for the third quarter ended September 26, 2021 was $34.2 million compared to $34.6 million for the quarter ended September 27, 2020, a decrease of $0.4 million or 1.1%.
A reconciliation of Restaurant-Level Adjusted EBITDA and adjusted EDITDA and the nearest GAAP financial measure is included under “Non-GAAP Measures” in the accompanying financial data below.