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High Bluff Capital Partners Emerges as Winner in Auction for 81 Hardee’s Restaurant Locations
Experienced Investment Firm Behind Revitalizations of Church’s Texas Chicken, Quiznos and Taco Del Mar Set to Acquire Locations Formerly Operated by Summit Restaurant Holdings
July 17, 2023 10:00 AM Eastern Daylight Time
SAN DIEGO--(BUSINESS WIRE)--High Bluff Capital Partners, the experienced investment firm driving the revitalizations of Church’s Texas Chicken, Quiznos and Taco Del Mar, will assume ownership of 81 Hardee’s restaurant locations, following a court-approved auction process for the assets of Summit Restaurant Group and related entities, a former Hardee’s operator that filed for Chapter 11 in May. The Sale Hearing in the Chapter 11 case is set for July 18, 2023. The transaction is expected to close in August.
With locations in Alabama, Florida, Georgia, Kansas, Missouri, Montana, South Carolina, and Wyoming, the portfolio is consistent with High Bluff’s strategy of investing in iconic consumer-facing brands, with a strong presence in historically underserved markets, that have the opportunity for significant growth and value creation.
“Hardee’s is a regionally strong brand, known for its quality, hand-crafted menu,” said High Bluff Capital Partners founder Anand Gowda, who has been investing in consumer brands for more than two decades. “These restaurants in many cases have served as central neighborhood hubs, where people and families come to gather and connect,” he added. “It’s in areas like these where we see the greatest opportunity to create value by truly having a positive impact on local communities and the people who call them home. Guests aren’t just craving delicious food, they’re craving togetherness and we are thrilled to partner with the Hardee’s team to deliver that.”
“Throughout this process, we have maintained that the restaurants would be sold to a qualified and well-capitalized buyer with demonstrable success across the restaurant, food and beverage markets,” said Max Wetzel, chief executive officer of CKE Restaurant Holdings, Inc., Hardee’s parent company. “With an impressive track record of growing numerous consumer brands, High Bluff is the ideal partner to support our efforts to deliver outstanding service and the foods our core customers crave, while making critical investments in restaurant remodels and other initiatives designed to boost traffic and sales.”
“We are excited about the additional scale and diversity the Hardee’s opportunity brings to our platform,” said Coady Smith, a principal at High Bluff Capital Partners. “Over the next few years, we plan to continue to aggressively pursue new acquisitions, with a goal of growing our platform to six to ten restaurant concepts with $75 to $100 million of EBITDA.”
Dave Dixon, a deeply experienced QSR sector leader with extensive experience driving sales and growing EBITDA, will oversee the operations of the acquired Hardee’s locations. Over the course of his career, he has worked with restaurants brands including KFC, Burger King, Culver’s, Popeyes, Church’s Chicken, Slim Chickens and Hardee’s, where between 2000-2003 he led the turnaround of 116 Hardee’s locations, increasing sales by 35 percent.
About High Bluff Capital Partners Based in San Diego, CA, High Bluff Capital Partners is a private investment firm that specializes in making control-oriented equity investments in iconic consumer-facing companies. The firm’s team has over 30 years of experience managing, investing, leading and transforming consumer businesses across the restaurant, entertainment, food, beverage and retail markets. High Bluff acquired Quiznos and Taco Del Mar in 2018, and Church’s Texas Chicken in 2021. For more information please visit www.highbluffcap.com.
About CKE Restaurants Holdings, Inc. CKE, a privately held company based in Franklin, Tennessee, owns and operates Carl's Jr.® and Hardee's®, two beloved brands, known for premium and innovative menu items such as iconic Charbroiled Burgers, Made from Scratch™ Biscuits and Hand-Breaded Chicken Tenders™. With both a US and international footprint, Carl's Jr. Restaurants LLC and Hardee's Restaurants LLC have more than 3,800 franchised or company-operated restaurants in 44 states and 43 foreign countries and U.S. territories. For more information about CKE, please visit www.ckr.com or its brand sites at www.carlsjr.com and www.hardees.com.
View source version at High Bluff Capital Partners
Meritage Reports Second Quarter 2023 Results; Continued Solid Growth Ahead
July 14, 2023 10:57 ET
GRAND RAPIDS, Mich., July 14, 2023 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s premier franchise operator, today reported financial results for the second quarter ended July 2, 2023.
Second Quarter Highlights
Sales increased 9.7% to $176.6 million compared to $161.0 million for the same period last year.
Earnings from Operations increased 14.9% to $8.9 million compared to $7.7 million for the same period last year.
Net Earnings were $5.9 million compared to $6.0 million for the same period last year.
Consolidated EBITDA (a non-GAAP measure) increased 7.6% to $15.6 million compared to $14.5 million for the same period last year.
“The increase in sales during the second quarter was driven by a combination of same store sales growth, newly acquired locations, and new store openings. Our restaurant teams continue to focus on managing controllable expenses, while our primary costs are forecasted to steadily improve over the next 12 months as inflation moderates.
The Company recently closed on the acquisition of 25 Wendy’s restaurants in North Carolina and Virginia, which will add approximately $42.0 million in annual sales and be accretive to earnings going forward.
The Company remains focused on growth and value creation as we continue seeking accretive restaurant opportunities for our operating platform,” stated Robert E. Schermer, Jr., the Company’s CEO.
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SHIPLEY DO-NUTS POSTS DOUBLE-DIGIT SAME-STORE-SALES GROWTH IN Q2
12 Jul, 2023, 13:00 ET
Brand's continued growth enhanced by new CEO, technology updates
HOUSTON, July 12, 2023 /PRNewswire/ -- Shipley Do-Nuts, a franchisor of a leading do-nut, kolache and coffee concept, continued its momentum through Q2 2023 with record-breaking same-store sales, new store openings and IT enhancements.
Shipley experienced 10.9% same-store sales growth year-over-year in Q2, driven in part by online ordering, which Shipley introduced late last year and has continued rolling out to all its locations this year. Year-to-date, the company has opened eight new locations, including in new states for the brand, Maryland and Georgia, as well as its home state of Texas.
Shipley also recently appointed industry veteran Flynn Dekker as the company's CEO to build upon the growth led by his predecessor Clifton Rutledge, who remains on the company's board of directors.
"Having joined the Shipley team at a pivotal point, I'm deeply encouraged by our track record of success, and we have big plans to take the brand to the next level in terms of sales and footprint," said Dekker. "The steps we're taking have improved our guest experience and increased sales for our existing franchisees and are attracting highly qualified new franchisees who want to be a part of the brand's success."
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Kura Sushi USA Announces Fiscal Third Quarter 2023 Financial Results
July 06, 2023 16:05 ET
IRVINE, Calif., July 06, 2023 (GLOBE NEWSWIRE) -- Kura Sushi USA, Inc. (“Kura Sushi” or the “Company”) (NASDAQ: KRUS), a technology-enabled Japanese restaurant concept, today announced financial results for the fiscal third quarter ended May 31, 2023.
Fiscal Third Quarter 2023 Highlights
Total sales were $49.2 million, compared to $38.0 million in the third quarter of 2022;
Comparable restaurant sales increased 10.3% for the third quarter of 2023 as compared to the third quarter of 2022;
Operating income was $1.3 million, compared to operating income of $0.5 million in the third quarter of 2022;
Net income was $1.7 million, or $0.16 per diluted share, compared to net income of $0.5 million, or $0.05 per diluted share, in the third quarter of 2022;
Restaurant-level operating profit* was $11.6 million, or 23.5% of sales;
Adjusted EBITDA* was $5.1 million; and
One new restaurant opened during the fiscal third quarter of 2023.
* Restaurant-level operating profit and Adjusted EBITDA are non-GAAP measures and are defined below under “Key Financial Definitions.” Please see the reconciliation of non-GAAP measures accompanying this release. See also “Non-GAAP Financial Measures” below.
Hajime Uba, President and Chief Executive Officer of Kura Sushi, stated, “I’m pleased to announce another excellent quarter for Kura Sushi, both in terms of restaurant-level performance and corporate initiatives. Year-over-year revenue has grown by approximately 30%, driven by our aggressive unit growth and industry-leading comparable sales trends. Our G&A leveraging efforts continue to bear fruit, with an improvement of 130 basis points over the prior year, as well. I’m exceptionally proud to see Kura Sushi continue to mature as a company as it expands its footprint and takes strides towards greater profitability.”
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Gen Restaurant Group raises over $43M with IPO
Published June 29, 2023
Gen Korean BBQ’s parent company, Gen Restaurant Group, plans to raise $25 million in an initial public offering. Retrieved from U.S. Securities & Exchange Commission on June 01, 2023
Dive Brief:
Gen Restaurant Group, parent of Gen Korean BBQ, has raised $43.2 million through its initial public offering, nearly double the company’s initial expectation of raising $25 million, the company said Tuesday.
The company, which began trading Wednesday, priced its stock at $12 per share and issued 3.6 million shares of Class A common stock. It granted underwriters the option to purchase an additional 540,000 shares through Friday.
Gen Restaurant Group is the second restaurant chain to begin trading on the New York Stock Exchange this year following Cava’s successful IPO, which raised $318 million earlier this month.
Dive Insight:
Gen Restaurant Group will use the proceeds from the IPO to purchase newly issued Class A units of Gen Restaurant Companies. The holding company will be the sole managing member of these units. As the managing member, the company “intends to cause Gen LLC to use the proceeds for general corporate purposes, including new restaurant openings,” according to the press release.
Gen Korean BBQ restarted its development in 2022 following the easement of COVID-19 restrictions. The company has opened three locations and signed nine additional leases since then. This year it plans to open six or seven locations, then step up to an annual pace of eight to 10 restaurants in new and existing markets in subsequent years. Gen Korean BBQ offers guests an interactive experience in which they cook their own meats at the table.
Gen has grown its average revenue per restaurant to $5.6 million as of the first quarter of this year, more than double its average of $2.2 million at the end of 2020, as detailed by Placer.ai. Fast-recovering foot traffic likely played into this revenue growth. By the end of Q1 2023, quarterly foot traffic per venue was 46.3% higher than the casual dining average, according to Placer.ai data.
“Much like other brands, GEN is likely benefiting from the evolution of consumer taste preferences due to a variety of factors,” Placer.ai’s content writer Ezra Carmel said. “Social media, access to a variety of options through third-party delivery, demand for better-for-you offerings, increased television programming devoted to food, and the globalization of restaurant concepts and menu innovations are all likely playing a part in GEN’s success.”
Gen Restaurant’s launch on the NYSE may do well given Cava’s success. Gen’s stock price rose to $18 shortly after it began trading on Wednesday and closed at just over $15 per share. Cava went public about two weeks ago with an initial stock price of $22, which went as high as $45 and closed at $43 during its first day of trading. Its stock price remained above $40 as of Wednesday. Panera Brands also is likely to go public in future quarters. It previously updated its leadership team to prepare for its eventual IPO. Fat Brands is also looking to make its Twin Peaks brand public as early as next year.
This uptick in IPOs contradicts earlier analysis that suggested 2023 wouldn’t be a good year to go public due to compressed margins and profitability struggles at restaurants. However, consumer interest has remained strong in the segment, giving investors possibly renewed interest in restaurant stocks.
View source version at Gen Restaurant Group
Darden Restaurants Reports Fiscal 2023 Fourth Quarter and Full Year Results; Increases Quarterly Dividend; And Provides Fiscal 2024 Outlook
22 Jun, 2023, 07:00 ET
ORLANDO, Fla., June 22, 2023 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the fourth quarter and fiscal year ended May 28, 2023.
Fourth Quarter 2023 Financial Highlights
Total sales increased 6.4% to $2.8 billion driven by a blended same-restaurant sales increase of 4.0% and sales from 47 net new restaurants
Same-restaurant sales:
Consolidated Darden
4.0 %
Olive Garden
4.4 %
LongHorn Steakhouse
7.1 %
Fine Dining
(1.9) %
Other Business
2.2 %
Reported diluted net earnings per share increased 15.2% to $2.58 as compared to last year's reported diluted net earnings per share of $2.24
The Company repurchased $35.2 million of its outstanding common stock
Fiscal 2023 Financial Highlights
Total sales increased 8.9% to $10.5 billion driven by a blended same-restaurant sales increase of 6.8% and sales from 47 net new restaurants
Same-restaurant sales:
Consolidated Darden
6.8 %
Olive Garden
6.7 %
LongHorn Steakhouse
7.4 %
Fine Dining
5.7 %
Other Business
7.0 %
Reported diluted net earnings per share increased 8.1% to $8.00, as compared to last year's reported diluted net earnings per share of $7.40.
"We had a solid quarter to conclude a strong year in which we met or exceeded our financial outlook, despite a tough operating environment," said Darden President & CEO Rick Cardenas. "Throughout fiscal 2023, our strategy continued to serve us well. In addition to our Back-to-Basics Operating Philosophy driving strong execution in our restaurants, Darden's Four Competitive Advantages of Significant Scale, Extensive Data & Insights, Rigorous Strategic Planning and our Results-Oriented Culture continued to enable our brands to compete more effectively and provide even greater value to their guests."
View full version at Darden Restaurants
Gather Holdings, LLC Secures Investment from MGG Investment Group for Oregon-Based Shari’s Restaurants
June 20, 2023 09:00 AM Eastern Daylight Time
BEAVERTON, Ore.--(BUSINESS WIRE)--Gather Holdings, LLC today announced that affiliates of MGG Investment Group LP (MGG) have made an investment in the company’s 42 Oregon-based restaurants that operate under the Shari’s Restaurants brand. Financial terms were not disclosed.
“We are pleased to have found a supportive partner in MGG, which recognizes the significant value of our Oregon-based portfolio of Shari’s Restaurants,” said Sam Borgese, owner of Gather Holdings. “MGG has deep knowledge of video lottery gaming operations, which are present in our 42 Oregon restaurants, and we look forward to leveraging their expertise as we continue to provide the delicious meals and entertainment our loyal customers expect.”
Dale Stohr, a Managing Director at MGG, stated, “As a capital partner of choice to entrepreneurs, we are pleased to provide Sam and his team with the resources to drive future growth in Gather’s Oregon portfolio of Shari’s Restaurants.”
Borgese added, “This new capital will ensure our restaurants can continue their recoveries from the challenges presented by the COVID-19 pandemic. I am grateful for the determination, resilience, and grit of our entire team of restaurant operators and support center employees who stood by the business and are the reason we are positioned for success.”
About Gather Holdings, LLC
Gather Holdings, LLC is the parent company of Shari’s Restaurants and Coco’s Restaurants. Shari’s Restaurant, founded in 1978, is one of the largest full-service community restaurant chains in the Pacific Northwest known for its hand-finished pies and breakfast all-day menu. Coco’s Restaurant’s corporate and franchise locations have been serving its world-famous burgers, breakfast, and freshly baked pies to consumers since 1948.
About MGG Investment Group LP
Founded in 2014, MGG is a private investment firm that provides bespoke investment solutions to mid-size and growing lower-middle market companies. MGG works with owners and management teams to help build lasting value, address immediate needs, and solve complex situations while seeking to generate attractive risk-adjusted returns for investors irrespective of and through market cycles. For more information, visit www.mgginv.com.
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CAVA Announces Closing of Initial Public Offering and Full Exercise of Underwriters’ Option to Purchase Additional Shares
June 20, 2023 04:15 PM Eastern Daylight Time
WASHINGTON--(BUSINESS WIRE)--CAVA Group, Inc. (“CAVA”), the category-defining Mediterranean fast-casual restaurant brand that brings heart, health, and humanity to food, today announced the closing of its initial public offering of 16,611,110 shares of its common stock at a price to the public of $22.00 per share, including the full exercise by the underwriters of their option to purchase up to 2,166,666 additional shares of common stock.
CAVA’s common stock is listed on the New York Stock Exchange and trades under the ticker symbol “CAVA.”
CAVA intends to use the net proceeds from the offering to fund future new restaurant openings, with any remaining proceeds for general corporate purposes, which may include the repayment of its delayed draw term loans used to finance construction and capital expenditures in respect of its new production facility in Verona, Virginia.
J.P. Morgan and Jefferies acted as joint lead book-running managers of the offering, and J.P. Morgan, Jefferies, and Citigroup acted as representatives of the underwriters for the offering. Citigroup and Morgan Stanley acted as joint bookrunners for the offering. Piper Sandler, Baird, Stifel, and William Blair also acted as joint bookrunners for the offering. Capital One Securities, Blaylock Van, LLC, and Drexel Hamilton acted as co-managers for the offering.
A registration statement on Form S-1 relating to the offering was declared effective by the Securities and Exchange Commission (the “SEC”) on June 14, 2023. Copies of the registration statement can be accessed through the SEC’s website at www.sec.gov. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, and shall not constitute an offer, solicitation, or sale in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.
The offering was made only by means of a prospectus. Copies of the prospectus related to the offering can be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204, or by email at prospectus-eq_fi@jpmchase.com; Jefferies LLC, Attn: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by telephone at (877) 821-7388, or by email at Prospectus_Department@Jefferies.com; or Citigroup Global Markets Inc., Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY, 11717, or by telephone at 800-831-9146.
Forward Looking Statements
This press release contains forward-looking statements. Forward-looking statements include all statements that are not historical facts. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. These forward-looking statements, including statements regarding the use of proceeds, are subject to a number of risks, uncertainties and assumptions, including those described under “Risk Factors” under CAVA’s registration statement relating to the offering. Except as required by law, CAVA has no obligation to update any of these forward-looking statements to conform these statements to actual results or revised expectations.
About CAVA
CAVA is the category-defining Mediterranean fast-casual restaurant brand, bringing together healthful food and bold, satisfying flavors at scale. Rooted in our rich Mediterranean heritage, we bring a timeless approach to modern wellness through our authentic cuisine and vibrant brand experience. Guided by our mission, we believe food is a unifier for a more diverse and inclusive world for our guests, team members, and our grower and rancher partners, where all are welcome at our table. We believe that consumers should not have to choose between taste and health – our innovative cuisine appeals to a wide variety of preferences, satisfying the modern consumer’s desires for flavorful, craveable, and nutritious food without compromise.
View source version at CAVA
Darden Restaurants Completes Acquisition of Ruth's Hospitality Group
14 Jun, 2023, 08:43 ET
ORLANDO, Fla., June 14, 2023 /PRNewswire/ -- Darden Restaurants, Inc. ("Darden") (NYSE: DRI), announced today that it has completed its acquisition of Ruth's Hospitality Group, Inc. ("Ruth's"). The Ruth's Chris Steak House brand now joins and complements Darden's portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahama Breeze.
Ruth's Chris features signature USDA Prime steaks served sizzling on 500-degree plates, New Orleans-inspired sides and an award-winning wine list. Ruth's Chris has 155 locations around the globe, including 81 company-owned or company-operated restaurants and 74 franchised restaurants.
Darden's tender offer for all of the issued and outstanding shares of Ruth's common stock at a price of $21.50 per share, without interest, net to the seller in cash, less any applicable withholding taxes, expired as scheduled at one minute after 11:59 p.m., New York City time, on June 13, 2023, and was not extended (such date and time, the "Offer Expiration Time"). American Stock Transfer & Trust Company, LLC, the depositary for the tender offer, has advised Darden that, as of the Offer Expiration Time, 22,853,263 shares were validly tendered and not validly withdrawn, which represented approximately 71.2% of the then-issued and outstanding shares. All of the conditions to the tender offer were satisfied, and Ruby Acquisition Corporation ("Purchaser"), an indirect wholly owned subsidiary of Darden, accepted for payment, and will promptly pay for, the tendered shares.
The acquisition was completed on June 14, 2023, through a merger of Purchaser with and into Ruth's in accordance with Section 251(h) of the General Corporation Law of the State of Delaware without a stockholder vote. In connection with the merger, each share not purchased in the tender offer was cancelled and converted into the right to receive $21.50 in cash, without interest, less any applicable withholding taxes. Following the consummation of the merger, Ruth's became an indirect, wholly owned subsidiary of Darden.
In connection with the completion of the merger, Ruth's common stock ceased trading on Nasdaq.
About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahama Breeze. For more information, please visit www.darden.com.
View source version at Darden Restaurants
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