Morehead Makes An Investment In Chop't
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.”
Chop’t officials had been working with Morehead for 18 months before finalizing the investment in late December. “In the same way that our real estate selection process is slow and disciplined our investor selection process is slow and disciplined,” Marsh said.
Tony Shure and Colin McCabe founded Chop’t Creative Salad Company in 2001, and the company is known for “pushing the boundaries of what a salad can be.” Some of the ingredients it uses in salads include steak and fried onions and a chicken “po’boy,” with panko fried chicken. Marsh invested in the chain in 2006 and became CEO five years later. “Our priority has always been to have an impact on how people are eating,” Marsh said. “We think the face of fast-food is changing.”
Chop’t is at an “interesting stage” in its life cycle, Marsh noted. The chain has been growing methodically over the years, focusing primarily on urban markets in New York and Washington D.C. More recently it has started moving into suburban locations. The investment from Morehead won’t necessarily mean the company will ramp up its growth, at least not in the short-term.
“We’ve grown very carefully, and I don’t think that’s going to change,” Marsh said. Yet he added that the deal would enable Chop’t to establish a foundation where the company can get into a position where it can grow more aggressively. “As we check off the boxes of what we need to grow well, smart and strongly, checking off the capital box is one of them,” Marsh said.
Marsh noted that Morehead Capital has “deep roots in the restaurant industry” and that it has a long-term focus on its investment. Morehead’s strategic partner is Investors Management Corporation, owner of the Golden Corral chain, and the company targets the restaurant industry among its investments. “I think that brings an appreciation and a focus on execution of operations and real estate,” Marsh said. “It brings an appreciation for elements that make a company successful over the long term.”