Flynn Restaurant Group, the massive operator of Applebee’s, Taco Bell and Panera Bread, on Wednesday added its fourth concept with the purchase of Arby’s largest franchisee, US Beef Corp., in one of the largest franchisee transactions in U.S. history.
Terms of the deal were not disclosed, but the acquisition will give Flynn 368 Arby’s units and will add another $400 million in sales to what is already a $1.9 billion company that is the largest franchisee of any kind in the U.S.
The deal closed Wednesday, giving Flynn 1,245 restaurants in its four brands in 33 states.
To put that into perspective, Flynn’s restaurants will have generated the same amount of sales as The Cheesecake Factory, Whataburger or Red Lobster, based on Technomic Top 500 data.
It also gives Flynn a massive holding in Arby’s, which has grown rapidly in recent years thanks to a succession of strong sales growth.
“The Arby’s brand aligns perfectly with our preference for brands that are truly differentiated and ‘best in breed’ in their segments,” Greg Flynn, founder and CEO of Flynn Restaurant Group, said in a statement. “Benefiting from very strong leadership, the Arby’s brand has achieved great momentum these past few years and we are truly excited about the opportunities that lie ahead.”
Flynn is the largest Applebee’s franchisee with 460 locations. It also operates 280 Taco Bell locations, making it that brand’s third-largest operator, and its 135 Panera Bread restaurants make it the fast-casual chain’s second-largest franchisee.
The deal continues a period of major consolidation in the franchise space, as operators fueled by lending, private equity and other investments have added units either through refranchising deals or by acquiring other operators. But it’s relatively rare to see an acquisition of a large company such as US Beef by another franchisee.
US Beef was founded in 1969 by Bob Davis and had been run by his sons, Jeff and John Davis. Under Flynn, the company will be known as RB American Group.
“The Davis family and their team of great operators built a fantastic business over 50 years and we’re privileged to be the ones to shepherd the US Beef restaurants to their next phase,” Flynn said.