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Mama Fu’s Biggest Franchisee Buys Noodle Chain

AUSTIN, Tex. (Blue MauMau) - Mama Fu's Noodle House, Inc., a chain of 17 eateries that was part of Atlanta-based Raving Brands portfolio of restaurant firms, has been sold for an undisclosed amount this week to its largest franchisee, Murphy Adams Restaurant Group. Murphy Adams operates five restaurants in Central Texas and one in development.

In 2003 Raving Brands launched Mama Fu's, an Asian concept in the growing fast-casual dining segment. Problems soon happened. In 2006 franchisees sued the firm, even naming its Chief Executive Martin Sprock in the suit, alleging that it had fraudulently declared it had a proven franchise system of many when in fact it only had a single company unit barely in operation. In the wake of that, Raving's concepts of Moe's Southwest Grill and Doc Green's were also embroiled in lawsuits. The founder of Raving Brands, Martin Sprock, spoke out about the legal troubles that accompanied him. Moe's was sold.

Randy Murphy, president and CEO of Murphy Adams, declares emphatically that those troubles are in the past. That is especially true since the assets to Mama Fu's have been acquired but the liabilities stay with Raving Brands. Murphy says, "That is a Raving Brands issue. It is unfortunate any time you see litigation, especially in a franchisee-franchisor relationship. We can only hope that those former franchisees find an equitable solution. That litigation never really affected us in Austin, Texas; Hollywood, Florida; or Bentonville, Arkansas as a franchisee. It really is very distant from us."

It's almost as if Murphy learned from a Chinese acquaintance during those times that the word "crisis" is made up of two Chinese characters meaning "danger" and "opportunity." That is the circumstance this franchisee found himself in as his franchisor struggled. Having five franchises, he found that he well understood how to run a successful multi-unit operation. Murphy observes, "We saw an opportunity to take that brand to the next level. Raving Brands as a holding company had a lot of brands and franchisees. We just have one thing on our plate, Mama Fu's."

Murphy has looked at this sector carefully and thinks this is the area in dining that looks particularly appealing. Murphy observes, "Asian food is a tremendously fast growing segment. There aren't as many players in the market for franchising and the brands that can support the system and franchisee partners the best will be the most successful. That is what we plan to do. We have the knowledge and experience to deliver on that. Plus, Mama Fu's is a very contagious brand in that you feel good when you enter and leave the restaurant. It is a positive, upbeat atmosphere with an excellent, affordable menu that resonates well with many demographics, especially families."

And the company seems to be off to a sizzling start. It has brought in a strong management team to devote full attention to the Asian dining concept. Murphy has nine years of background in the restaurant business. His partner, Mark Adams, is the founder and president of a string of eateries and service companies. Stephen MacManus joins them as the former chief operating officer of Johnny Carino's Italian Restaurants, having grown that chain to over 120 locations and having led Chili's Grill and Bar and Spageddies as an executive with Brinker International.

Murphy announced that the chain has an aggressive plan of 100 franchise stores in 5 years throughout the South.

The franchisee now turned franchisor will locate the chain's headquarters in his hometown of Austin, Texas. According to the company, the total turnkey start-up cost is $600K-$750K. The franchise fee is $25,000 per store, with 5% royalties. Murphy adds, "The financial outlay is manageable compared to potential revenue and margin opportunities."

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