Houston Foods To Buy Heartland Units
Large Burger King franchisee Heartland Food Corp. is selling the vast majority of its restaurants to the Dhanani Group, a Texas-based company that already owns nearly 200 Burger King locations and stands to become one of the biggest franchisees in the country.
Sources have confirmed that the company, led by Shoukat Dhanani, will buy 255 restaurants from Heartland, owned by the private equity group Blackstone Group.
Dhanani's Houston Foods already owns nearly 200 Burger King locations, in Texas and in New England, giving him a total of nearly 450 units, making it Burger King's second largest franchisee in the US. In addition, Dhanani along with his brother, Amin, own Z & H Foods, which operate about 90 Popeyes Louisiana Kitchen restaurants. Dhanani declined comment for this piece.
The purchase should complete the sale of Heartland Food, the second largest domestic franchisee in the Burger King system and the 11th largest restaurant franchisee in the US. The Illinois-based operator had previously sold 64 locations to the largest franchisee, Carrols Restaurant Group, for $18 million in a deal largely directed by the franchisor, which paid Heartland $2.1 million to facilitate that sale.
The Dhanani Group, which will operate the restaurants it gets from Heartland under the Tri City Foods Inc., name, is buying 163 restaurants fin Chicago, 51 in Omaha and 41 in Minneapolis. Existing Heartland management will remain with Tri City Foods. How much is being paid for the locations is uncertain. But based on other sales of Burger King restaurants lately the price is likely in the $75 million to $90 million range, and sources indicate that this deal involves about $100 million in debt.
Dhanani has a history of turning around struggling restaurants, having brought some closed Houston locations back to life. He was also an early adopter of Burger King's new prototype.