Private-investment firm High Bluff Capital Partners has acquired the Taco Del Mar quick-service chain from Franchise Brands LLC, the company said Monday.

San Diego, Calif.-based High Bluff in June completed its acquisition of the Quiznos parent QCE LLC. Terms of the deal to acquire Lynwood, Wash.-based Taco Del Mar were not disclosed.

“We see tremendous opportunity to continue to build out our platform in the mid-market restaurant franchise segment, which has many regionally strong concepts with significant growth potential,” said Gerry Lopez, High Bluff operating partner, in a statement.

Taco Del Mar opened its first restaurant in Seattle in 1992 and now has more than 100 franchised locations in the United States and Canada.

The concept’s menu items, which the brand emphasizes in its “Baja-style Coastal Mexican Cuisine” positioning, range from burritos and tacos to salads, bowls and enchiladas.

Lopez said Taco Del Mar fit well into High Bluff’s portfolio.

“Our approach is grounded in identifying brands that enjoy strong relationships with consumers that can benefit from the type of targeted capital, scale, management expertise and focus on innovation we bring to bear,” Lopez said.

The brand’s heritage in the Pacific Northwest, he added, provides “an excellent foundation to build upon as we look to leverage our platform to enhance support to the franchise base, develop and introduce fresh concepts that resonate with today’s consumers and broaden the brand’s appeal.”

Franchise Brands LLC, which was created in 2005 by founders of the Subway sandwich chain, bought the Taco Del Mar brand in a 2010 bankruptcy auction.

The Milford, Conn.-based Franchise Brands bid $3.3 million for the then-200-unit Taco Del Mar chain.

Contact Ron Ruggless at ronald.ruggless@knect365.com 

Follow him on Twitter: @RonRuggless

With a new investor joining in and a higher purchase price, the Garces Restaurant Group late Tuesday announced the sale of almost all of its restaurants for $8 million plus assumed liabilities.

The Philadelphia-based multiconcept group has been acquired by an entity called 3BM1, which is a partnership between Ballard Brands LLC — which had previously announced plans to buy some of Garces restaurants out of bankruptcy for $5 million — and Philadelphia investor David Maser, an attorney with the law firm Cohen Milstein Sellers & Toll.

The transaction, which closed on Tuesday, was approved by a U.S. Bankruptcy Court judge in Camden, N.J., Garces Group said — though the reorganization process will continue.

The operating name of the entity going forward has yet to be determined, a company spokesperson said.

Under the deal, 3BM1 will take ownership of most of famed chef Jose Garces’ portfolio, including the restaurants Amada, Tinto, Village Whiskey, The Olde Bar, JG Domestic, Volvér and event company Garces Events.

The new owners will also take over management contracts for Olón and Okatshe in the Tropicana Hotel in Atlantic City; as well as locations of Amada and Distrito, which have reopened in Ocean Resort Casino in Atlantic City after a brief closure while the property changed hands. 3BM1 will also operate foodservice for the CHUBB Conference Center in Lafayette Hill, Pa., and Ortizi in New York City.

Two Garces Group restaurants will close, however: The restaurant 24 will shutter after service on July 14 as the company relocates its corporate headquarters and test kitchen. And Garces Trading Company in Philadelphia, which was not part of the sale, will close after brunch service on July 15 after nearly a decade.

Employees at the restaurants to be shuttered will be offered other positions within the group’s portfolio, officials said, and the intent is to maintain employment for most, if not all, of the group’s 750 employees overall.

Separately, Garces, the Ecuadoran-American chef who opened his first restaurant in 2005, will retain ownership of the restaurants Distrito and Buena Onda, both in Philadelphia.

As part of the deal, Garces will also remain as the group’s chief culinary officer. 

“This is a new beginning for our company,” Garces said in a statement. “This Ballard team has been with us every step of this process, as true partners, and we can now focus on the future together.

“I am looking forward to working with the team to identify new concepts that will entice our customers and attract new ones,” he added, promising the experience and quality at existing restaurants will not change. “In fact, things are going to keep getting better.”

Ronnie Artigues, general counsel of Ballard Brands, has been named CEO of the new entity.

Based in Covington, La., Ballard Brands was formed in 2001 by brothers Paul, Scott and Steve Ballard, and the company operates 153 restaurants in 28 states under the Smoothie King, Wow Café, PJ’s Coffee of New Orleans, The Original City Diner, Boardhouse Serious Sandwiches, Richard Fiske and Ole Saint brand names. 

The Ballard team sees the managed services and catering divisions as strong areas of growth for the Garces Group restaurants, the company said.

“Chef Garces has developed a brand that transports people to different cultures through his creative cuisine and by creating environments people love. Amada is the perfect example of that, and we look forward to all the potential of building a revived, powerful brand,” said Paul Ballard, co-founder of Ballard Brands, in a statement.

Maser, meanwhile, said his involvement is an investment in the Philadelphia economy.

“Chef Garces has been a central force behind Philadelphia’s emergence as a premier restaurant city and destination,” he said in a statement. “I am pleased to be involved as a partner in this transaction to bring together the Ballard team with Jose as we preserve local jobs and inject new life into a vital local brand.” 

Contact Lisa Jennings at lisa.jennings@knect365.com

Follow her on Twitter: @livetodineout

In a move reflecting how many busy Americans now look at mealtime, The Kroger Co. plans to acquire private meal kit company Home Chef in a deal valued at up to $700 million.

The agreement, announced late Wednesday, will bring to Kroger one of the nation’s largest meal kit providers in Home Chef, which delivers more than 3 million meals a month from its distribution centers in Chicago, Atlanta and San Bernardino, Calif. Home Chef's DCs reach 98% of all continental U.S. households within a two-day delivery window.

Plans call for Chicago-based Home Chef to become a Kroger subsidiary, continue to operate its offices and facilities, and maintain its online business on HomeChef.com. In addition, Home Chef will oversee Kroger's meal solutions portfolio, with Home Chef meal kits being made available to Kroger shoppers in stores and online. The companies said Home Chef's offerings will complement Kroger's Prep+Pared meal kits now sold in more than 525 stores.

"Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef's innovative and exciting products and services to Kroger's customers will help make meal planning even easier and mealtime more delicious," Kroger Chief Digital Officer Yael Cosset said in a statement. "This merger will introduce Kroger's 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities and contribute to Restock Kroger." Restock Kroger is the Cincinnati-based company’s strategic plan to redefine the food and grocery customer experience.

Under the acquisition agreement, Kroger is slated to pay an initial price of $200 million plus future earnout payments of up to $500 million over five years based on the achievement of certain milestones, “including significant growth of in-store and online meal kit sales,” the companies said. Home Chef, founded in 2013, saw 150% growth last year to reach $250 million in revenue, including two profitable quarters.

"We've long believed that the future of our industry is omnichannel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable," said Home Chef founder and CEO Pat Vihtelic. "We're thrilled that we will be part of the Kroger family and plan to maintain our relentless focus on innovation that meets customers' evolving food needs. Kroger's expansive retail footprint will allow us to serve millions of more customers across the country with simple, convenient and enjoyable meal solutions."

Home Chef’s meal kits are designed for anyone to be able to cook. Delivered weekly, the kits feature fresh, pre-portioned ingredients with easy-to-follow recipes no matter what level of cooking experience. They also cater to a wide range of tastes. The companies noted that Home Chef leads the meal kit sector in terms of variety, going beyond a one-size-fits-all model with such options as 5 Minute Lunches, Flexible Servings, and new meals requiring minimal prep time.

"As one of the fastest-growing meal kit companies in the country, Home Chef is poised for even more explosive growth," Cosset said. "Home Chef's combination of culinary expertise and a customer data-driven decision-making process is right in line with Kroger's vision to serve America through food inspiration and uplift by providing meal solutions for every lifestyle."

Kroger and Home Chef expect the transaction to close in the second quarter, pending regulatory approval and customary closing conditions.

Though new meal kit providers continue to pop up, and meal kits are increasingly appearing in supermarkets, the space is seen as a big, untapped consumer market. Nine percent of Americans have bought a meal kit in the last six months (10.5 million households), and 25% would consider trying one in the next six months (over 30 million households), according to research by Nielsen.

Of the 9% of Americans who have tried a meal kit, 6% purchased it online, where meal kit companies are seeing robust growth, Nielsen noted. However, in-store meal kits last year generated $154.6 million in sales, up more than 26% year over year.

For Kroger, the largest U.S. supermarket company, the acquisition of Home Chef continues its efforts to adapt to new ways that today’s time-pressed consumers shop for and consume food.

Last week, Kroger unveiled an exclusive partnership with British online supermarket Ocado to develop a seamless omnichannel shopping experience in the United States. The companies aim to build three automated warehouses this year and identify up to 20 potential sites for the facilities over the first three years of their agreement. Under the deal, Kroger is hiking its current investment in Ocado by 5, bringing its stake in the U.K. company to more than 6%.

Private investment firm High Bluff Capital Partners has closed on a purchase of QCE LLC, parent to the Quiznos toasted sandwich chain, the company said Monday.

The Denver-based fast-casual brand said Susan Lintonsmith would continue as CEO and president under ownership by the San Diego, Calif.-based investment firm. Terms were not disclosed.

“I’m proud of the progress we’ve made in the past few years,” said Lintonsmith, who was named CEO in 2016 after serving four years as the chain’s chief marketing officer, in a statement.

“I’m excited about the future with High Bluff Capital Partners, and the level of experience and commitment they bring to Quiznos,” Lintonsmith said. “I believe this is the infusion we need to take the brand to the next level.”

Quiznos, which was founded in Denver in 1981, has about 800 locations in 32 countries.

Although Quiznos’ net U.S. unit losses have gotten smaller in each of the past several years, the company still closed more than 100 units in fiscal 2017, which represents nearly a quarter of the brand's units just a year earlier.

Quiznos emerged from bankruptcy in 2014 following a restructuring and controlling interest was held by a group of private-equity investors, including Oaktree Capital Management, Fortress Investment Group, Caspian Capital Advisors, MSD Capital LP and others.

According to Nation’s Restaurant News’ Top 200 research, Quiznos had 367 domestic units as of the December-ended fiscal 2017, down from 479 in the Preceding Year. U.S. systemwide sales fell to $148.8 million in fiscal 2017, down from $195.2 million in the Preceeding Year.

High Bluff Capital Partners specializes in the acquisition of consumer-facing brands and companies that present transformation opportunities, the company said in a press release.

“Quiznos is an iconic brand with strong awareness and attractive upside in the sandwich segment,” said Gerry Lopez, operating partner for High Bluff Capital Partners and executive chairman of the new company that will operate the Quiznos brand.

“We are excited about the acquisition,” Lopez said. “We have the commitment, industry knowledge and flexible capital to build on recent successes and drive future, sustainable growth.”

Shaun Klein at the Dentons law firm served as adviser to High Bluff Capital Partners. Holland & Hart LLP served as legal and Brookwood Associates as merger and acquisition advisers to QCE LLC.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

Follow him on Twitter: @RonRuggless

ARC Group Inc., parent to the Dick’s Wings & Grill casual-dining concept, is working toward a purchase of the struggling Tilted Kilt Pub and Eatery concept, the company said this week.

Jacksonville, Fla.-based ARC wants to complete the purchase of the 47-unit Phoenix, Ariz.-based Tilted Kilt within the next three months, said Rick Akam, CEO of the company formerly known as American Restaurant Concepts and owner of the 23-unit Dick’s concept.

“ARC wants to complete this transaction, but we just need to take a step to get the financing to do so,” Akam said in an interview Tuesday.

As an intermediary step, Tilted Kilt has executed sale agreements with SDA Holdings LLC, a company owned by Fred W. Alexander, who is a member of ARC’s board. SDA is funding the purchase with a loan from Seenu Kasturi, ARC Group's chairman, primary owner and chief financial officer.

“When we get some financing in place through ARC, we’ll complete the transaction,” Akam said.

“We’ve been working with the Maxim Group out of New York, and we’re pretty far down the pike as far as going out and making a raise to do this transaction,” he added. “If I had to estimate, it’s two to three months away.”

All but two of Tilted Kilt’s 47 units are franchised, and Akam said the remaining system has 37 franchisees for the 45 units.

The heavily franchised system is similar to Dick’s Wings, which ARC bought in January 2013, he said. ARC owns and operates two of the units and the remainder are franchised. The casual-dining units generally cover 3,500 to 4,500 square foot; about half the restaurants have full liquor service and the other half offer just beer and wine. Dick’s Wings units are in Florida and Georgia.

Akam, who started with Atlanta-based Hooters in 1984 and served as president and CEO until October 2003 as well as worked with Dallas-based Twin Peaks in 2011 and 2013, said ARC has been able to hone the Dick’s Wings & Grill format.

“We were able to take Dick’s Wings & Grill from a 14-unit chain in 2013 up to 23 units,” he said. The brand has two concessions at EverBank Field [home to the Jacksonville Jaguars National Football League team.

“It was a struggling chain started in 1994,” Akam said. “What we were able to do with average unit volumes and sales gave us a lot of confidence in looking at something like Tilted Kilt, which has struggled the past few years with identity, store closures and unsatisfied franchisees.”

According to Nation’s Restaurant News Top 200 research, Tilted Kilt’s fiscal 2017 sales were an estimated or reported $117.4 million, down from $156 million in in 2016 and $175 million in 2015.

Akam said Tilted Kilt, which has shuttered about half its system since 2014, still has good name recognition.

“They have restaurants scattered throughout the U.S., which is harder to manage but, from an identity standpoint, they are in a lot of different regions,” he said. “We felt we had a good opportunity to grow those regions strategically and maybe get away from the single-ownership philosophy.”

Akam said the ARC team can “make a difference” in the Tilted Kilt brand.

 “Over the next 60 days, it’s our goal to do a lot of discovery with the franchisees and current staff and get a better idea of what their challenges are out there, whether they be menu or branding or marketing or whatever,” he said.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

Follow him on Twitter: @RonRuggless 

The plant-based Native Foods Café chain has a new owner with plans to grow.

With 13 restaurants in four states, the Chicago-based fast-casual concept was acquired by private-equity-firm Millstone Capital Advisors, based in St. Louis, the company announced Thursday.

Terms of the deal were not disclosed, but former owner Daniel Dolan has retained a stake and remains on the board. The company said the current management team, including president Scott McDonnell, will continue to lead the brand. 

A Nation’s Restaurant News Breakout Brand in 2015, Native Foods was owned previously by Andrea McGinty and husband Dolan.

The concept was first launched in Palm Springs, Calif., in 1994 by chef Tanya Petrovna, who later sold it to McGinty and Dolan in 2009. The couple moved the company headquarters to Chicago.

In 2014, the chain won a $15 million investment from Laurel Crown Partners LLC and Huntington Capital, which had followed a $10 million investment in 2013 by NGEN Partners. 

At the time, there were few other fully vegan or vegetarian restaurant concepts, but McGinty and Dolan saw growing consumer interest in plant-based dining.

In 2014, the chain had reached 26 units and had plans to open 200 more over the next five years.

Instead, the chain ended up closing a number of restaurants in Washington, D.C., Los Angeles and Denver, as officials set out to rework the brand to compete with growing competition — not only from other plant-based chains, but also from the improving vegan and vegetarian offerings increasingly found on all restaurant menus.

Native Foods, however, estimates that the large majority of its customers eat meat, but are drawn by the menu — with global dishes like pad Thai, bulgogi kimchi tacos and vegetarian chicken and waffles — as well as the chain’s environmentally friendly business practices.

Citing a 2017 GlobalData study, the number of U.S. diners who identify as vegan increased 600 percent — from 1 percent to 6 percent of the population — between 2014 and 2017, the company said. 

“In 1994, our company first set out to bring compassionate dining to the fast-casual segment,” said McDonnell in a statement. “We are eager to share our passion for great food and creative, innovative and diverse menu offerings with more customers in both new and existing markets, and we’re confident Millstone Capital Advisors is the right partner to help us realize this goal.”

Millstone, meanwhile, said the investment will help Native Foods expand. It’s the second restaurant investment for the private-equity firm, which also owns the Lion’s Choice family of restaurants, with 26 locations in the St. Louis area. 

“To be aligned with a brand with the core values and healthy, sustainable dining options that Native Foods Café has is an honor,” said Robert Millstone, the firm’s managing director, in a statement. “The plant-based dining segment has experienced solid year-over-year growth and Native Foods Café has been at the forefront of this segment for well over 20 years. We feel they are well positioned for even greater success and we intend to help them achieve this through organic, fiscally responsible and sustainable growth.”

In an interview, Millstone declined to give growth projections, saying the first step is working with existing management to discuss strengths and challenges and “put in place missing pieces.”

“We’ll grow as quickly as we can while maintaining the quality of food and the experience,” he said. “It’s too early to say how many stores will open.”

Though he declined to give systemwide sales, Millstone said sales this year were up in double digits year-over-year, in part because the brand hits on current trends toward plant-based dining, sustainability and healthy eating.

“We think it has all the attributes to be a very strong company, not just today but going forward,” he said.

Contact Lisa Jennings at lisa.jennings@knect365.com

Follow her on Twitter: @livetodineout

Update: June 21, 2018 This story has been updated to clarify previous ownership of Native Foods Café and to include additional comment from Robert Millstone.

SBE Entertainment Group, parent company of the Umami Burger chain and operator of several of José Andrés’ restaurants, among many others, has found a new investor to fuel its expansion.

AccorHotels and SBE have signed a letter of intent for Accor to acquire 50 percent of SBE. The hotel group said it would invest $319 million in SBE to buy the common equity and preferred units owned in part by Cain International, giving it a 50 percent stake. SBE founder and CEO Sam Nazarian will continue to own the remaining half of the company.

Accor said it would buy the common equity for $125 million and invest $194 million in a new preferred debt instrument to buy the preferred shares. The deal is expected to be completed July 31.

Cain International invested in SBE in 2016 to help fund its expansion.

Nazarian said the long-term investment by Accor “supports our collective ambition to be the best lifestyle hospitality company in the market,” and would help fuel expansion in the U.S., and abroad, particularly in Europe.

AccorHotels chairman and CEO Sébastien Bazin said the investment would allow the Paris-based hotel group to expand its footprint in the United States, particularly in “key U.S. cities such as Miami, Los Angeles or Las Vegas, and in other international destinations.”

He added: “‘The new luxury’ is all about exclusive experiences and incredible lifestyle concepts and SBE brands have the perfect know-how that will complete perfectly the AccorHotels portfolio.”

SBE’s Disruptive Restaurant Group includes José Andrés concepts The Bazaar, with locations in Beverly Hills, Calif.; Las Vegas; Miami and Miami Beach, Fla., as well as Tres in Beverly Hills. It also operates the Umami Burger casual-dining chain, with about 20 units, and Katsuya, Cleo, Leynia, Diez & Sez and Filia restaurants. Additionally, SBE has numerous hotel and luxury residential brands including SLS, Delano, Mondrian, Hyde and the Redbury Hotels. It said it plans to operate 25 hotels by the end of 2018 as well as 170 restaurants and entertainment venues.

Contact Bret Thorn at bret.thorn@knect365.com 

Follow him on Twitter: @foodwriterdiary

Private-equity firm Centerbridge Partners L.P. is exploring a sale of the P.F. Chang’s China Bistro casual-dining chain after owning it for six years and splitting off its sibling brand, the fast-casual Pei Wei Asian Kitchen.

Centerbridge and the board of Scottsdale, Ariz.-based Wok Parent LLC announced Friday they had retained Bank of America’s Merrill Lynch and Barclays to oversee a possible sale of P.F. Chang’s, which it took private in a $1 billion deal in July 2012.

“Given the positive performance of P.F. Chang's Bistro and having received multiple unsolicited indications of interest, this is an exciting time to explore a sale,” said Steve Silver, global co-head of private equity at New York City-based Centerbridge, in a statement.

“We have a deep, talented team and compelling growth initiatives, including unit expansion of both our domestically operated and international franchise businesses,” Silver said.

P.F. Chang’s has 307 locations, operating 214 in the United States and franchising another 93 restaurants in 24 countries. A company spokesperson said the brand plans to open seven additional U.S. restaurants this year and several more overseas, including the first location in Pakistan later this month.

The company said P.F. Chang’s restaurants generated an average unit volume of $4.1 million in 2017. U.S. systemwide sales, according to Nation’s Restaurant News’ Top 200 research, were an estimated $912.9 million in 2017, up from $906.2 million in the preceding year.

“We have enjoyed a very positive partnership with Centerbridge,” said Michael Osanloo, P.F. Chang’s CEO, “and are excited to tell prospective buyers about the company’s heritage, its attractive positioning in full-service Asian dining, the operational strengths of the business that we have built during Centerbridge’s ownership and its exciting growth prospects.”

The company split off the 200-unit fast-casual Pei Wei Asian Kitchen brand into a separate business and last year moved the fast-casual concept’s headquarters from Scottsdale to Irving, Texas.

Pei Wei Asian Kitchen had an estimated $339.9 million in U.S. systemwide sales in 2017, down from $357.2 million in the preceding year, according to NRN Top 200 estimates.

The P.F. Chang’s China Bistro brand was founded in 1993 by chef Philip Chiang and Paul Fleming, and it is celebrating its 25th year this month with special offers and contests through July 25.

Contact Ron Ruggless at ronald.ruggless@knect365.com 

Follow him on Twitter: @RonRuggless

FAT Brands Inc. has completed the previously announced acquisition of Hurricane Grill & Wings for $12.5 million, the company said Thursday.

Los Angeles-based FAT Brands said the acquisition of West Palm Beach, Fla.-based Hurricane, which has more than 50 units in eight states, included $8 million in cash and $4.5 million in preferred stock.

FAT said the deal brings its total restaurants to more than 325, including Fatburger, Buffalo’s Cafe, Buffalo’s Express and Ponderosa and Bonanza steakhouses.

“The completion of this acquisition will allow our management team to expand Hurricane’s footprint in both existing markets and new international markets through the company’s extensive network of franchise partners,” Andy Wiederhorn, FAT Brands president and CEO, said in a statement. 

FAT brands said Hurricane Grill & Wings, founded in 1995, complements its existing portfolio of brands, which includes Buffalo’s Cafe and Buffalo's Express, both chicken wing brands.

FAT, which stand for “fresh, authentic and tasty,” completed a $24 million Regulation A+ initial public offering in October, raising $24 million under new rules that enable small companies to raise money from investors in a “mini IPO.” 

“We are excited to complete our first acquisition since our IPO, and we remain committed to asset-light growth through a combination of accretive acquisitions of franchise brands and organic new store growth of existing brands,” Wiederhorn said.

John Metz, president and CEO of Hurricane Grill, added: “We are honored to officially join the FAT Brands family. This partnership will enable our team to leverage FAT Brands' proven expertise and robust infrastructure to realize our brand potential and grow our presence around the world.”

Separately, Brooksy Smith, who headed marketing and development Hurricane Grill’s three-unit Hurricane BTW (Burgers, Tacos and Wings) concept, said he would be leaving the company and returning to his role as president of the Houston-based Big Fish Brands LLC, which advises and manages small and mid-sized businesses.

Hurricane Grill & Wings first opened in Fort Pierce, Fla., in 1995 and has locations in Alabama, Arizona, Colorado, Florida, Georgia, Kansas, New York and Texas.

Contact Ron Ruggless at ronald.ruggless@knect365.com

Follow him on Twitter: @RonRuggless

Private-investment firm High Bluff Capital Partners has acquired the Taco Del Mar quick-service chain from Franchise Brands LLC, the company said Monday.

San Diego, Calif.-based High Bluff in June completed its acquisition of the Quiznos parent QCE LLC. Terms of the deal to acquire Lynwood, Wash.-based Taco Del Mar were not disclosed.

“We see tremendous opportunity to continue to build out our platform in the mid-market restaurant franchise segment, which has many regionally strong concepts with significant growth potential,” said Gerry Lopez, High Bluff operating partner, in a statement.

Taco Del Mar opened its first restaurant in Seattle in 1992 and now has more than 100 franchised locations in the United States and Canada.

The concept’s menu items, which the brand emphasizes in its “Baja-style Coastal Mexican Cuisine” positioning, range from burritos and tacos to salads, bowls and enchiladas.

Lopez said Taco Del Mar fit well into High Bluff’s portfolio.

“Our approach is grounded in identifying brands that enjoy strong relationships with consumers that can benefit from the type of targeted capital, scale, management expertise and focus on innovation we bring to bear,” Lopez said.

The brand’s heritage in the Pacific Northwest, he added, provides “an excellent foundation to build upon as we look to leverage our platform to enhance support to the franchise base, develop and introduce fresh concepts that resonate with today’s consumers and broaden the brand’s appeal.”

Franchise Brands LLC, which was created in 2005 by founders of the Subway sandwich chain, bought the Taco Del Mar brand in a 2010 bankruptcy auction.

The Milford, Conn.-based Franchise Brands bid $3.3 million for the then-200-unit Taco Del Mar chain.

Contact Ron Ruggless at ronald.ruggless@knect365.com 

Follow him on Twitter: @RonRuggless

With a new investor joining in and a higher purchase price, the Garces Restaurant Group late Tuesday announced the sale of almost all of its restaurants for $8 million plus assumed liabilities.

The Philadelphia-based multiconcept group has been acquired by an entity called 3BM1, which is a partnership between Ballard Brands LLC — which had previously announced plans to buy some of Garces restaurants out of bankruptcy for $5 million — and Philadelphia investor David Maser, an attorney with the law firm Cohen Milstein Sellers & Toll.

The transaction, which closed on Tuesday, was approved by a U.S. Bankruptcy Court judge in Camden, N.J., Garces Group said — though the reorganization process will continue.

The operating name of the entity going forward has yet to be determined, a company spokesperson said.

Under the deal, 3BM1 will take ownership of most of famed chef Jose Garces’ portfolio, including the restaurants Amada, Tinto, Village Whiskey, The Olde Bar, JG Domestic, Volvér and event company Garces Events.

The new owners will also take over management contracts for Olón and Okatshe in the Tropicana Hotel in Atlantic City; as well as locations of Amada and Distrito, which have reopened in Ocean Resort Casino in Atlantic City after a brief closure while the property changed hands. 3BM1 will also operate foodservice for the CHUBB Conference Center in Lafayette Hill, Pa., and Ortizi in New York City.

Two Garces Group restaurants will close, however: The restaurant 24 will shutter after service on July 14 as the company relocates its corporate headquarters and test kitchen. And Garces Trading Company in Philadelphia, which was not part of the sale, will close after brunch service on July 15 after nearly a decade.

Employees at the restaurants to be shuttered will be offered other positions within the group’s portfolio, officials said, and the intent is to maintain employment for most, if not all, of the group’s 750 employees overall.

Separately, Garces, the Ecuadoran-American chef who opened his first restaurant in 2005, will retain ownership of the restaurants Distrito and Buena Onda, both in Philadelphia.

As part of the deal, Garces will also remain as the group’s chief culinary officer. 

“This is a new beginning for our company,” Garces said in a statement. “This Ballard team has been with us every step of this process, as true partners, and we can now focus on the future together.

“I am looking forward to working with the team to identify new concepts that will entice our customers and attract new ones,” he added, promising the experience and quality at existing restaurants will not change. “In fact, things are going to keep getting better.”

Ronnie Artigues, general counsel of Ballard Brands, has been named CEO of the new entity.

Based in Covington, La., Ballard Brands was formed in 2001 by brothers Paul, Scott and Steve Ballard, and the company operates 153 restaurants in 28 states under the Smoothie King, Wow Café, PJ’s Coffee of New Orleans, The Original City Diner, Boardhouse Serious Sandwiches, Richard Fiske and Ole Saint brand names. 

The Ballard team sees the managed services and catering divisions as strong areas of growth for the Garces Group restaurants, the company said.

“Chef Garces has developed a brand that transports people to different cultures through his creative cuisine and by creating environments people love. Amada is the perfect example of that, and we look forward to all the potential of building a revived, powerful brand,” said Paul Ballard, co-founder of Ballard Brands, in a statement.

Maser, meanwhile, said his involvement is an investment in the Philadelphia economy.

“Chef Garces has been a central force behind Philadelphia’s emergence as a premier restaurant city and destination,” he said in a statement. “I am pleased to be involved as a partner in this transaction to bring together the Ballard team with Jose as we preserve local jobs and inject new life into a vital local brand.” 

Contact Lisa Jennings at lisa.jennings@knect365.com

Follow her on Twitter: @livetodineout

The embattled founder of Papa John’s International reportedly was in talks with Wendy’s about merging the burger and pizza brands, according to sources cited Wednesday by the Wall Street Journal.

When asked if the merger talks were true, representatives for both Wendy’s and Papa John’s said they would not comment.

The purported merger comes as Papa John’s is under siege following a public relations debacle tied to its ousted founder and chairman, John Schnatter. The former CEO resigned after he admitted to using a racial slur during media training with a marketing agency. 

“The talks between Wendy’s officials and Mr. Schnatter, who still sits on the board and owns 29 percent of Papa John’s, were preliminary and began before he stepped down as chairman last week,” the Wall Street Journal said citing “people familiar with the matter.”

“The talks, which Papa John’s board was aware of, have cooled since the incident,” one of the sources said.

Schnatter founded the company in 1984, and he retains a board seat.

On Sunday, the board of Louisville, Ky.-based Papa John’s terminated its 2007 Founder Agreement, which called for him to attend corporate events, participate in management and investor meetings and act as brand spokesman. The company also removed Schnatter from its advertising.

Papa’s John’s, the nation’s third largest pizza chain, has previously dealt with controversy around Schnatter’s actions. In December, Schnatter stepped down as Papa John’s president and CEO  after he blamed the company’s flagging sales on the National Football League for not quelling players’ on-field “take a knee” protests.

Contact Nancy Luna at nancy.luna@knect365.com 

Follow her on Twitter: @FastFoodMaven

Krispy Kreme Doughnuts is reportedly nearing an acquisition of the Insomnia Cookie delivery company, according to CNBC.

The Winston-Salem, N.C.-based Krispy Kreme, which was acquired by European investment company JAB Holding Co. in 2016, would expand its treats line with the addition of New York City-based Insomnia Cookies, which deliveries late night until 3 a.m. from its nearly 140 locations, most of which are near college campuses.

“JAB indeed has no comment on the report,” a spokesman for JAB said via email.

Krispy Kreme and Insomnia had not responded by press time.

JAB Holding Co. has been actively building its restaurant portfolio in recent years. The company acquired Krispy Kreme Doughnuts Inc. for $1.35 billion in 2016 and last year acquired Panera Bread Co. in $7.5 billion deal last year. JAB also owns Einstein Noah and its Peet’s Coffee & Tea and Caribou Coffee divisions as well as other food brands like Keurig Green Mountain coffee.

The Insomnia acquisition, according to CNBC sources, would value the cookie company at about $500 million. Sources said it could be announced within a few weeks.

“The sources, who cautioned a deal could still fall apart, requested anonymity because the information is confidential,” CNBC said.

Insomnia Cookies is a chain of bakeries that specializes in delivering warm cookies and cold milk. It was founded 2003 by Seth Berkowitz, then a student at the University of Pennsylvania.

Krispy Kreme has about 1,400 locations in 32 countries, and specializes in doughnuts and coffee.

Contact Ron Ruggless at ronald.ruggless@knect365.com 

Follow him on Twitter: @RonRuggless

Krispy Kreme Doughnut Corp. has long fed early morning sugar cravings with its iconic warm glazed doughnuts. But, now the Winston-Salem, N.C.-based doughnut chain is entering the late-night munchies market.

Krispy Kreme, owned by European investment company JAB Holding Co., announced plans Friday morning to acquire a majority stake in a bakery company that specializes in late-night delivery of warm baked goods. New York City-based Insomnia Cookies, founded in a college dorm room at the University of Pennsylvania, has now grown to nearly 140 locations across the country.  The bakery company earned its early fame among college students, as Insomnia delivers up to 300 cookies to residence halls as late as 3 a.m.

Krispy Kreme Doughnut did not disclose terms of the deal, nor did the company discuss how it plans to leverage the cookie delivery company. 

In a statement, Krispy Kreme CEO Mike Tattersfield said the 81-year-old doughnut brand is “delighted” to add the rapidly growing Insomnia Cookies to its portfolio.  The cookie company sells traditional cookies, brownies and party packs. Its website shows new stores entering California, Arizona and Washington state.

“While our companies will continue to operate independently, these two great brands can learn a great deal from each other as we each continue to expand and grow,” he said.

When asked to comment beyond the press release, a Krispy Kreme spokeswoman declined to offer further details about the acquisition.

Seth Berkowitz, who founded Insomnia 15 years ago while in college, said in a statement that he and Tattersfield share the same ambitions for their brands: “To be the best at what we do and delight consumers with the highest quality sweet treat experiences,” he said in a statement. “My team and I are confident that this shared vision makes Krispy Kreme the ideal partner to support Insomnia through our next phase of growth.”

The transaction is expected to close in the fourth quarter of 2018. Berkowitz will continue to lead the cookie company, which will operate independently, Krispy Kreme said.

The Insomnia acquisition, according to CNBC sources, would value the cookie company at about $500 million. 

Insomnia will join a JAB Holding Co. portfolio that already includes several brands specializing in baked goods and treats. The company acquired Krispy Kreme Doughnuts Inc. for $1.35 billion in 2016 and last year acquired Panera Bread Co. in $7.5 billion deal last year. JAB also owns Einstein Noah and its Peet’s Coffee & Tea and Caribou Coffee divisions as well as other food brands like Keurig Green Mountain coffee.

Krispy Kreme has about 1,400 locations in 32 countries.

Contact Nancy Luna at nancy.luna@knect365.com

Follow her on Twitter: @FastFoodMaven

Executives from fast-casual Garbanzo Mediterranean Fresh have made a “significant” equity investment in the San Francisco-based La Boulangerie bakery-café concept, leaders of the two companies said Friday.

James Park, Garbanzo CEO, said he and real-estate investor Michael Staenberg, who holds an 84 percent ownership stake in the Denver-based chain, have partnered with Pascal Rigo, left, the founder and operator of La Boulangerie, to expand, franchise and license the brand. Garbanzo has 28 units, and La Boulangerie has eight.

Terms of the deal were not disclosed. Nicolas Bernadi will remain as CEO of La Boulangerie, Park said.

Park said the investors, including Bernadi, have created a new company called Modern BOSS, standing for Back Office Shared Services, to administer such business functions as accounting, financing, forecasting, accounts payable and other general and administrative duties.

“One of the challenges of a growing organization is the obstacle of the general and administrative costs,” Park said in an interview Friday. “Modern BOSS will support the business and let the core functions such as operations and marketing to continue without the additional burden of the G&A.”

Modern BOSS, based in Denver, will use business software created at Garbanzo, Park said. The platform can be used as the partners look at other acquisitions, he said.

“We’re looking at a couple of other restaurant concepts and perhaps other businesses in the hospitality space,” Park said.

Majority Garbanzo owner Staenberg also owns the 27-unit St. Louis, Mo.-based Lion’s Choice roast beef sandwich quick-service concept, the 32-unit Minneapolis, Minn.-based casual-dining Granite City Food & Brewery (a Nation’s Restaurant News Hot Concepts honoree in 2007) and The Shack, a seven-unit breakfast-lunch concept.

In the meantime, the new Garbanzo-La Boulangerie partnership has plans to expand the bakery concept.

“There are two being built right now,” Park, left, said, “and we will continue to build somewhere from three to five in the Bay Area within the next 15 months.” Park said La Boulangerie is actively pursuing real estate in Denver and St. Louis. Garbanzo has units in six states.

Starbucks Corp. acquired Rigo’s La Boulange bakery, founded in 1995, for $100 million in 2012, but the coffee giant shut down the brand in 2015 and sold five of 23 units back to Rigo and Bernadi. They reopened the stores as La Boulangerie and added three more.

“It is exactly what we are looking for in a great partner,” Rigo said of the new partnership. “They have skills we don’t have. They are a great operation, and they can bring a great deal in the area of real estate. … If you have a great concept and don’t know where to put it, you have nothing.”

Rigo says he foresees the La Boulangerie concept fitting in a variety of locations. “We’re not going to stick to one format or square footage,” he said. “We will be able to bring something good to our customers anywhere.”

Park said Garbanzo is also expanding. New units are set to open soon at the University of Notre Dame near South Bend, Ind., Moravian College in Bethlehem, Pa., and at Denver International Airport.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

Follow him on Twitter: @RonRuggless

Celebrated Spanish chef José Andrés has struck a deal to take control of one of his best known brands: The Bazaar by Jose Andres.

Though it had his name in the title, the Bazaar restaurants weren’t his to grow and market until now. His Washington D.C.-based restaurant group, ThinkFoodGroup (TFG) has taken ownership of The Bazaar brand from luxury hotel owner SBE Entertainment Group.   Andrés and SBE did not disclose the value of the deal, which will allow Andres to grow the brand outside the portfolio of SBE venues.

The first Bazaar, a collection of Spanish-themed restaurants, opened nearly a decade ago at SBE’s luxury SLS Beverly Hills. It earned four stars from the Los Angeles Times. The restaurant was developed by Andrés, and SBE CEO Sam Nazarian. Renowned designer Philippe Starck was behind the brand’s look and décor.

From the start, The Bazaar, which Andres refers to as “a collection of my memories and my dreams,” was a huge sensation for the James Beard-award winning chef.  Together with SBE, Andres opened other iterations of The Bazaar at SLS-branded hotels in Florida and Las Vegas.

“This acquisition allows Andrés and TFG to now expand the brand globally beyond SLS, whether as a stand-alone restaurant or in a hotel,” SBE and TFG said in a joint announcement.

Representatives for TFG did not provide specific details about where Andrés plans to open the next Bazaar.

“The Bazaar is a concept very dear to me, and one of my most exciting and rewarding creations as a chef, especially its constantly evolving nature that makes each one new and different,” Andrés said in a statement.  “While SLS has been and will continue to be an excellent home for Bazaar, now being able to assume full control of the brand allows me and my team to explore all its possibilities and continued evolution, throughout the globe.” 

SBE said the change in ownership will not affect any of the current four locations; the company said it will continue to host The Bazaar concepts “across its current and future hotels” as the hospitality group moves forward with its robust pipeline of venues around the world. 

Nazarian said SBE is looking forward to watching Andres grow the brand further. “We are excited by the brand’s expansion and look forward to continuing our collaboration by potentially bringing Bazaars within our pipeline of sbe hotels.”

Note: Andrés will be the keynote speaker at this year’s MUFSO conference, presented by Nation’s Restaurant News.

Contact Nancy Luna at nancy.luna@knect365.com

Follow her on Twitter: @FastFoodMaven

Del Frisco’s Restaurant Group Inc. expects to see more real estate opportunities among the benefits from its recently completed acquisition of the Barcelona Wine Bar and Bartaco brands, executives said Friday.

The Irving, Texas-based Del Frisco’s, which closed on its $325 million acquisition of Norwalk, Conn.-based Barteca Restaurant Group on June 27, has hired an outside consult to help integrate the two companies and expects the process to be completed by the end of 2019, said Norman Abdallah, DFRG CEO, in a second-quarter earnings call.

“Once completed, there will be cost-saving opportunities in purchasing across the portfolio, because of combined know-how and capabilities for best-in-class supply chain,” he said, adding that general and administrative expenses should also decline.

“From a real estate standpoint, we will have significant leverage with developers and landlords because of our distinctly positioned growth brands with industry-leading economics and the respect that Del Frisco's name has with national developers,” Abdallah said.

Del Frisco’s has proven attractive to landlords for the upscale consumers it draws, he said, and the company plans to leverage that with Bartaco and Barcelona.

The company already has seen an example of that leverage, Abdallah said.

“There is a location that Barcelona was looking at and we were looking at,” he said. “We are able to secure the location instead of Barcelona due to our Del Frisco's guarantee, and we came in at a $30-per-square-foot price lower than what Barcelona would have been able to get the site for.”

Abdallah added that the outside consultant expects the integration of the two companies to go well “because our cultures are so similar.”

Jeff Carcara, a former operations chief with Del Frisco’s before joining Barteca, stays in his position but returns to the Del Frisco’s team as CEO of the new “Emerging Brands” division, Abdallah said.

“Both teams have engaged each other very quickly, and we're really operating as one team already, which is fantastic,” he said. “It allows us to keep everybody focused on the day-to-day operations of the restaurants, while we continue to build the best-in-class shared services.”

Since the acquisition closed on June 27, the first day of Del Frisco’s third quarter, Barteca’s operating performance was not included in Del Frisco’s financial results for the most recent reporting period.

For the second quarter ended June 26, DFRG swung to a net loss of $1.6 million, or eight cents a share, from a profit of $2.1 million, or nine cents a share, in the same period last year. Revenues rose 9.4 percent to $90 million from $82.3 million in the prior-year quarter.

Systemwide same-store sales decreased 1.4 percent, with a 7.5 percent decline in customer counts and a 6.1 percent increase in average check. By brand, same-store sales declined 1.2 percent at Del Frisco’s Double Eagle Steakhouse, increased 0.7 percent at Del Frisco’s Grille and slipped 6 percent at Sullivan’s Steakhouse.

The company said that Barteca’s equivalent second-quarter sales, while not included in DFRG’s earnings, totaled $36.9 million, which included $16.7 million at Barcelona and $20.1 million at Bartaco. Combined same-store sales at both brands declined 1.2 percent in the second quarter, increasing 1.8 percent at Barcelona and declining 4 percent at Bartaco.

Bartaco opened a new restaurant in the second quarter, bringing its total to 17. Barcelona has 15 restaurants, with two projected fourth-quarter openings in Charlotte, N.C., and Raleigh, N.C.

In guidance for fiscal 2018, executives said the company expects to open four Del Frisco’s Double Eagle Steakhouses, three Del Frisco’s Grilles, the two Barcelonas and up to four Bartacos. Closures in the fiscal are expected to range from four to seven, with up to four Grilles, two Sullivan’s Steakhouses and one legacy Bartaco. Two Grilles and two Sullivan’s have already been closed this year.

In May, DFRG said it was again seeking strategic options for the then-14-unit Sullivan’s.

“We have received several bids from interested parties to purchase the concept and continue to engage in discussions,” Abdallah said Friday. “There can be no assurance if or when we will consummate a transaction or the terms of any transaction.”

The company said it expected systemwide same-store sales for the fiscal year to be between negative 1.5 percent and positive 0.5 percent.

On strong area of sales this year, Abdallah noted, has been private dining at the Double Eagle and Grill locations. In the second quarter at the Grilles, he said, private-dining revenues rose 48 percent over the same period last year.

“Private dining continues to be an opportunity for us that we are pursuing through centralizing resources, introducing a new software platform and improving our private-dining menu options,” Abdallah said.

Contact Ron Ruggless at ronald.ruggless@knect365.com

Follow him on Twitter: @RonRuggless

Abu Dhabi-based Alliance International Investment is in talks to sell the global restaurant-and-nightclub operator Hakkasan Group, according to a Bloomberg report Monday.

Las Vegas-based Hakkasan Group — the operator of restaurant brands including Yauatcha, Herringbone, Yellowtail and the namesake Hakkasan — has drawn interest from the Spain-based hospitality company Pacha Group and investment firm Certares, the report said, citing undisclosed sources familiar with the deliberations.

No final decisions have been made and the talks may not lead to a sale, the report also indicated. Hakkasan Group did not respond to requests for comment as of press time.

Hakkasan Group, meanwhile, has been repositioning in recent years. The growing group operates roughly 60 restaurants and nightclubs worldwide.

A proposed merger with hotel, restaurant and nightlife group SBE in Los Angeles fell through, officials confirmed earlier this year.

Earlier this month, Los Angeles-based The H.wood Group separated from Hakkasan Group, reacquiring a significant equity stake and reclaiming global rights to its portfolio of restaurants and nightclubs, including Shorebar, The Nice Guy, Bootsy Bellows and Blind Dragon.

Chef Brian Malarkey, whose Searsucker and Herringbone brands were acquired by Hakkasan Group in 2014, earlier this year stepped down from his position with the group to focus on his own company.

Contact Lisa Jennings at lisa.jennings@knect365.com

Follow her on Twitter: @livetodineout

On Thursday, Focus Brands Inc. and Jamba, Inc. announced that the companies have entered into a definitive merger agreement, where Focus Brands will acquire Jamba for $13.00 per share in cash, in a transaction valued at approximately $200 million.

The deal is expected to close in the third quarter of 2018.

"Benefiting from an extremely loyal customer base and strong franchise operators, Jamba Juice is one of the category leaders in the fast-growing smoothie and juice category,” said Steve DeSutter, CEO of Focus Brands in a news release. “We are excited to welcome Jamba Juice with such an iconic heritage into our family of well-known and highly loved ’fan favorite’ brands.”

Atlanta-based Focus Brands is the parent company to Carvel, Moe's Southwest Grill, McAlister's Deli, Auntie Anne’s, Cinnabon and Schlotzsky’s. Through these brands, Focus Brands is franchisor and operator of more than 5,000 restaurants, cafes, ice cream shop and bakeries in the U.S., the District of Columbia, Puerto Rico and over 50 foreign countries. Jamba Juice has more than 800 locations worldwide.

“We are delighted to have reached this agreement with Focus Brands and are confident that it will result in a positive outcome for our guests, our franchisees and our employees,” said Dave Pace, CEO of Jamba, Inc in the news release. “Over the last few years, we have worked hard to strengthen our foundation and reposition this iconic brand for the future. Partnering with Focus Brands will allow us to build on this work and further accelerate the Company’s growth.”

North Point Advisors LLC is serving as financial advisor, and DLA Piper LLP is serving as legal counsel to Jamba. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to Focus Brands.

Contact Gloria Dawson at gloria.dawson@knect365.com 

Follow her on Twitter: @GloriaDawson

Real Mex Restaurants, whose core brands are Chevys, Acapulco and El Torito, has filed for Chapter 11 bankruptcy protection, the company announced Monday.

The filing comes six years after the Cypress, Calif.-based company emerged from an earlier bankruptcy. In a statement, Real Mex said the most recent bankruptcy filing will allow current co-owner Z Capital Group to take total ownership of the brand through an asset sale. 

Terms of that deal were not disclosed. However, Z Capital Croup and co-owner Tennenbaum Capital Partners have agreed to provide $5.5 million in “financing to ensure an efficient bankruptcy and sale process.”

The company said Real Mex restaurants, which has 78 restaurants under seven brands, will remain open and operate as usual during the bankruptcy process.  The bankruptcy does not impact 11 independently owned and operated Chevys restaurants.

“Today's filing is an important step in completing the sale process that Real Mex began late last year," Bryan Lockwood, Rel Mex CEO, said in a statement.  "The support from Z Capital and Tennenbaum will help minimize any disruptions and ensure that the process is seamless for our guests, employees and vendors. We're looking forward to completing this transaction as swiftly as possible and emerging from Chapter 11 in a stronger financial position, poised for future growth."

When Lockwood was named CEO in 2015, the former Tavistock chief executive implemented a turnaround plan that included overhauling existing restaurants and shuttering cash-poor locations. Lockwood was the company’s fourth CEO in five years at the time.

In 2016, he also said the company was looking to add another brand with annual sales between $100 million and $300 million to its portfolio. He wanted a concept that appealed to a younger generation of diner.

Instead, the company’s focus has been on modernizing some of its core brands and closing units with no chance of survival.  At the end of 2015, Real Mex operated about 109 Chevys, Acapulco and El Torito restaurants. Today, the company’s portfolio of chains, and independent concepts totals 78. One of its one-off concepts is Las Brisas in Orange County, Calif.

The company spent thousands of dollars remodeling the iconic Las Brisas, known for its panoramic views of the Pacific Ocean in Laguna Beach, Calif. The restaurant had remained largely untouched since it took over the old Victor Hugo Inn space in 1979.  

Contact Nancy Luna at nancy.luna@knect365.com 

Follow her on Twitter: @FastFoodMaven