City Capital Ventures, a Chicago-based investment firm, said on Thursday that it has made a majority investment in Rackson Restaurants, a 55-unit Burger King and Popeyes franchisee based in Bridgewater, N.J.
Rackson operates locations in six states in the Northeast and Mid-Atlantic U.S. and is led by CEO Chris Johnson, a second-generation fast-food operator.
Johnson in a statement said this is a “critical moment in Rackson’s growth journey.”
“The caliber and expertise of CCV and their advisors will strengthen our operational excellence and turbocharge our growth strategy,” Johnson said.
Dan Kipp, managing partner of City Capital, said in a statement that Burger King’s “flame grilling since 1954 message “is well-positioned in today’s QSR market and allows Burger King to enjoy a playful, attractively irreverent position as the No. 2 QSR burger concept in the world.” He also said CCV looks forward to supporting Johnson “as he continues to focus on operational excellence and growth through acquisition.”
The Rackson transaction is CCV’s second in the Burger King system, following a 2019 acquisition of Canada’s largest burger King franchisee, The Redberry Group, which operates 111 locations north of the border.
Investment groups have been buying up franchisees in recent years, eager for the long-term returns and cash such businesses generate. There is also relative safety in investing in a large franchisee of a well-known brand, especially one growing through acquisitions.
MUFG provided senior debt for City Capital’s investment in Rackson. Perkins Coie was legal counsel for CCV and Mastodon Ventures was financial advisor to Rackson and Mayer Brown was the franchisee’s legal counsel.
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