If you’re a big franchisee who operates a large, well-known brand and controls a big market, now might be a good time to sell. That’s because, amid a flurry of deals late last year and a growing interest in the franchise sector, multiples for such companies appear to be heading into a stratosphere typically reserved for franchisors.
When news first broke that Bob Evans was looking to sell Mimi’s Café, one estimate put the price for the chain at over $200 million. Instead, it sold this week to LeDuff America for $50 million. But not even that gives a full indication of how much the price for Mimi’s has declined in the year it’s been for sale.
Bob Evans bought a hot restaurant concept called Mimi’s Café in 2004 for $103 million, much of which was assumed debt. Nine difficult years later, Bob Evans is selling Mimi’s, but not at a profit. The Columbus, Ohio-based company said today that it sold Mimi’s to LeDuff America for $50 million.
Is health food the next big wave? Investors sure think so. Current shareholders and other investors, led by Los Angeles-based private equity group Brentwood Associates, recently pumped $20 million into Santa Monica-based vegetarian fast-casual chain Veggie Grill.
In a note this morning following meetings with McDonald’s executives, Goldman Sachs analyst Michael Kelter said that McDonald’s national launch of “Mighty Wings” may be on the horizon, effectively confirming the worst fears of every chicken wing buyer in the United States.
That Chuy’s investment appears to be working out for Goode Partners, the New York-based private equity fund that is the controlling investors in the Texas-based Mexican chain. Goode is selling the bulk of the 4.5 million shares that late yesterday priced at $25 a share.
In 2008, if you gave 100 people $1,000 each to invest in a restaurant stock, perhaps one would have chosen Ann Arbor-based Domino’s Pizza, and for good reason. People had seemingly grown tired of pizza, particularly Domino’s variety. Its stock struggled to break $3 a share, and had been languishing for years.
The vast majority of workers are starting to get lighter paychecks this month, thanks to the end of the 2-percent payroll tax holiday agreed to in the January 1 budget deal between Congress and the president. Invariably, some of this money might have gone to restaurants. The big question is how much.
Congress approved the Jumpstart Our Business Startups (JOBS) Act last year with the desire to improve startups’ ability to get investments and then make it easier for them to go public. But it hasn’t done much for the IPO market beyond making it uncertain who is about to go public.
Plenty of good restaurant chains went public last year, but few of them were the high-growth concepts investors are drooling over and none were in the fast-casual sector that is leading restaurant industry growth. That will almost certainly change in 2013, and the most likely IPO will come from Noodles & Co.
Companies presenting at this year's ICR XChange investors conference in Miami were often asked, usually more than once, about the impact on health insurance mandates set to take effect in 2014. We couldn't help but notice that their views were somewhat muted.
Famous Dave's stock languished last year and hasn't done much since the mid-2000s, but this could be the Minneapolis-based chain's year, though not necessarily for anything it's doing yet. The reason? The company has some activist investors.
How much is Sardar Biglari's name worth? $18.5 million, at least right now. That's how much Biglari Holdings would have to pay its chairman for the use of his name should the San Antonio-based company decide to give him the boot according to a recent SEC filing.
Patrick Dempsey’s bid for the Tully’s coffee chain will come under heavy scrutiny when a U.S. Bankruptcy Court judge holds a hearing this afternoon to approve the sale. Both shareholders and other bidders are objecting to Global Baristas’ $9.15 million purchase offer, including Starbucks, which wants a do-over.
JJ Buettgen isn’t wasting time. The CEO of Maryville, Tennessee-based Ruby Tuesday—who is seven weeks into the job—is already making some big changes. This afternoon, he announced that the company plans to immediately exit some of the chain’s side businesses, notably its seafood concept Marlin & Ray’s.
We’re asking analysts to give us their 2013 stock picks for a story to run in the Monitor. Mark Smith, analyst at Feltl & Company, dithered for a while. “The problem is,” he confessed, “I just don’t like anybody right now.” He doesn’t see a lot of positive for the restaurant industry this year, and his pessimism isn’t unique.
If Patrick Dempsey ultimately gets the Tully’s Coffee chain for $9.15 million, he should probably send some autographed photos to Green Mountain headquarters. That’s because his victory in the auction last week came about only after the Vermont-based coffee maker—and owner of Tully’s brand name—objected to partial bids, according to sources.
Morehead Capital is taking a bite of some salad. The North Carolina-based fund late last month completed a recapitalization and equity investment in the 20-unit New York-based salad chain Chop’t. Terms of the deal were not disclosed but, according to CEO Nick Marsh, “It was a pretty significant transaction.”
Barring some sort of unforeseen roadblock, the Tully’s Coffee chain will remain in tact, all thanks to an actor. Global Baristas, the company formed by an investment group led by Patrick Dempsey, won yesterday’s auction—according to Dempsey himself, who declared via Twitter that rival bidder Starbucks “blinked.”
Few restaurant stocks performed as well last year as did Oklahoma City-based drive-in chain Sonic, which seemed to recover from a lengthy slump that had taken it down from a lofty perch as a darling of the franchise restaurant world. Now the company hopes that an even bigger emphasis on national ads can help it maintain that success.
Despite a presidential election, problems in Europe and fiscal cliff concerns, investors generally had a good 2012. For all of that volatility, the S&P 500 finished with its best increase in three years, up more than 13 percent for the year. The restaurant industry mostly matched this growth.
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