Ron Schaich, founder and chairman of Panera Bread, is a frequent speaker on the dangers of today’s rampant investor activism with its short-term outlook and the quarter-to-quarter thinking it has inspired. In 2017 about one in five publicly traded restaurant companies were set upon by activist investors, he adds.
Mergers & Acquisitions
News about company buy outs and mergers
Quick service restaurant chain Jollibee Foods Corporation has taken complete control over Denver-based franchisor Smashburger, according to its former holding company, Black Shamrock Partners.
Flynn Restaurant Group announced it has acquired 368 Arby’s restaurants from franchisee US Beef Corporation, adding $400 million in sales to Flynn.
U.S. Beef announced on Wednesday the sale of all its restaurants, passing the mantle of largest Arby's restaurant franchisee to RB American Group, a wholly owned subsidiary of the Flynn Restaurant Group. Flynn is also a franchise operator of Applebee's, Panera Bread and Taco Bell. The Arby's acquisition brings the Flynn Restaurant Group's portfolio to a total 1,245 quick-service, fast casual and casual dining restaurants. Together they account for $2.3 billion in sales, the most of any franchisee ever.
Jack in the Box is considering selling the company, according to news leaked yesterday. The company has been suffering from soft sales. The National Jack in the Box Franchisee Association rendered a vote of "no confidence" in July and followed it up last month by asking that CEO Lenny Comma be replaced and a CMO be hired.
News of the possible sale caused the company's stock price to pick up substantially. The increased share price doesn't help franchisees.
Last Tuesday Dallas-based Taco Bueno Restaurants LP announced that it filed a voluntary petition for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Northern District of Texas. The franchising firm plans to reorganize and emerge from insolvency under a prepackaged plan where multi-concept franchisee Sun Holdings will take over.
ARC Group, Inc. (OTC:ARCK) announced on Tuesday that it will acquire the troubled Tilted Kilt Pub and Eatery from SDA Holdings, LLC for $10. However, ARC will assume Tilted Kilt’s debt of $1.8 million and future liabilities of $1.5 million. It will also issue 1.4 million in stock. For its obligations, ARC acquires a brand of 42 restaurants from California to New York that last year generated revenues of almost $14 million.
Four private equity firms and a hedge fund have been named as strong buyout contenders for Papa John’s. Its stock price has ranged from $69.45 to $38.05 over the last 12 months, and its recent low prices on the bottom end of that range are said to have piqued the interest of investors.
Founder John Schnatter, who regrets resigning as the company’s chairman in July and has been publicly battling the company since then, still owns 30 percent of the company.
Founded in 1870 by Louis Charles Graeter and his wife Anna, fourth-generation-owned Graeter’s Ice Cream Co. has completed the purchase of 11 locations from its last remaining franchisee, Tedesco LLC. Cincinnati, Ohio-based Graeter’s has over 54 units in Kentucky, Indiana, Illinois, Ohio and Pennsylvania.
CEO Rich Graeter told me [Hannah McCartney, data editor, Cincinnati Business Courier] the buyback was for one simple reason: "Nobody can run a store with your name on it as well as you do."