The parent of Olive Garden and Capital Grille has agreed to buy the Cheddar’s Scratch Kitchen chain for $780 million in cash from the private-equity firms L Catterton and Oak Investment Partners.
The deal will give Darden Restaurants another relatively young casual-dining brand with ample room to expand. Cheddar’s currently extends to 165 locations, as compared with Olive Garden’s 843 branches. Darden’s other brands include LongHorn Steakhouse, with 488 units.
Cheddar’s also fits Darden’s preferences for company-operated chains. Only 25 of Cheddar’s stores are franchised, and the brand has been buying franchisees. Within Darden’s brands, only LongHorn has been franchised, and only on a limited, mostly foreign basis.
In announcing the deal, Darden said that Ian Baines, a former Darden executive, will remain president of Cheddar’s, reporting to Darden CEO Gene Lee.
"Cheddar's is a great fit in the Darden portfolio because it complements our existing brands. This addition will also enable Darden to further strengthen two of our most important competitive advantages: our significant scale and our extensive data and insights," Lee said in a statement.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.