Johnny Rockets Is Up For Sale
By Jonathan Maze, February 4, 2013
Red Zone Capital is looking to get out of the burger business. The private equity group, started by Washington Redskins owner Daniel Snyder, is exploring a possible sale of Johnny Rockets, the 50s-themed burger chain it has owned for nearly six years.
Sources have told us that Johnny Rockets is being shopped, and a company spokeswoman confirmed today that it has hired an investment firm to explore a sale. The spokeswoman said that interest in Johnny Rockets has picked up since the sale of Dick Clark Productions last year.
We’ve been told that North Point Advisors is handling the sale, and that several buyers are interested in the chain.
Red Zone will likely ask for quite a bit. Prices for restaurants have come up lately as numerous investment groups and strategic buyers have turned an eye on the restaurant industry and its ability to generate cash, while low interest rates is giving them more cash to play with.
Johnny Rockets is in an interesting position. It’s in a hotly contested burger market flooded with different players. While there is no question that people love their burgers, there are some reports of weak sales at burger concepts in certain markets flooded with competitors. Still, a burger chain up for sale may prove too tempting for investors to pass up.
And Johnny Rockets has staked out positions in touristy areas while also building an interesting business at alternative sites and in international markets. The Aliso Viejo, California-based chain was founded in 1986 and has grown to more than 200 locations.<< back