Fast-growing eatertainment chain Punch Bowl Social’s newest investor is an unlikely one: Cracker Barrel.
The Lebanon, Tenn.-based operator of the highway-side family dining restaurants on Tuesday announced it is making an investment of up to $140 million into Punch Bowl, acquiring the stake previously owned by the private equity firm L Catterton.
The deal will give Cracker Barrel a noncontrolling stake in Punch Bowl but will give the company an option to buy the chain outright.
Punch Bowl operates 17 locations in 12 states and is known for combining high-quality food with entertainment such as bowling and shuffleboard.
The equity infusion will give Punch Bowl growth capital for future development.
The companies said that a portion of the equity infusion is expected to be offset by financing.
“Cracker Barrel and Punch Bowl Social are both highly experiential brands that emphasize quality food and beverage, hospitality and fun,” Cracker Barrel CEO Sandy Cochran said in a statement. “We love what Punch Bowl Social has built and are excited about helping them continue to grow.”
Punch Bowl’s system sales grew by 34% last year to $46.5 million, according to data from Restaurant Business sister company Technomic. Unit volumes average about $7 million. Robert Thompson founded the chain in 2012.
In a statement, Thompson called the relationship with Cracker Barrel “a tremendous opportunity for the entire Punch Bowl Social family.”
“Our continued goal is to be an experiential millennial and Gen Z lifestyle brand that creates authentic, social guest experiences,” he said. “Having Cracker Barrel provide growth capital and strategic resources sets us up for the next exciting chapter for Punch Bowl Social.”
UPDATE: This story has been updated to correct Punch Bowl Social's average unit volumes.