Financing

Fast casual Dig gets a $65M investment

The funding round, which includes support from a Danny Meyer-backed fund and others, will help the pandemic-battered 30-unit chain reopen temporarily closed restaurants and double its store count over the next three years.
Dig
Photo courtesy Dig

Fast-casual chain Dig, which suffered through store closures and layoffs during the pandemic, received a $65 million investment led by a Danny Meyer-backed fund and others, the chain announced Wednesday.

The 30-unit “vegetable-forward” concept said it would use the money to reopen locations temporarily shuttered during the pandemic as well as opening new restaurants with the goal of doubling its unit count over the next three years. Currently, 25 of the chain's restaurants have reopened. 

Investors in the $65 million round included Meyer’s Enlightened Hospitality Investments, a previous backer, as well as new investors Kitchen Fund, Eminence Capital and Inherent Group, among others.

Dig said the cash infusion would enable it to invest heavily in its workforce.

For the last year, the New York City-based chain has tested four-day workweeks in Boston and Philadelphia for all full-time employees. The operator said the tests have shows “overwhelmingly positive impacts on team members’ ability to create balance and fulfill personal needs” and that it intends to roll the program out to other markets next year.

Dig has also bumped up all hourly wages by $2, with average hourly pay in NYC exceeding $18.50. Employees who worked through the pandemic will receive a “gratitude bonus.”

The chain also started offering fully paid parental leave for eligible employees earlier this year and it is about to embark on a pilot program with NYC to offer a “company-supported daycare for the hospitality industry,” it said in a statement.

To provide career development, the brand started its Dig Academy as a six-week training program for all of its chefs. Over the next three years, Dig plans to expand the offerings to include both in-person and digital classes on topics such as cooking, business strategy, finance, leadership and marketing.

Dig was founded in 2011 as Dig Inn. The chain operates a 20-acre vegetable farm in Chester, NY, that supplements its produce from other sources.

“Part of Dig’s mission to rebuild the food system is to create a diverse, equitable and inclusive food system by prioritizing sourcing from historically underrepresented groups including BIPOC farmers, queer farmers, women farmers and beginning farmers,” the chain said in a statement.

It was reported early this year that Dig was seeking $15 million in “rescue financing” after being battered by the pandemic. In 2019, Dig received a $20 million investment, led by Meyer’s firm.

Pre-COVID, Dig had 32 open restaurants and more than 1,100 employees. In February, it only had 14 open units and 613 workers.

Adam Eskin, Dig’s founder and CEO, previously told Restaurant Business that his company had hired Piper Sandler late last year to “run a process that contemplates enough capital to get through COVID.”

Dig said it is now looking to expand beyond its Northeast base to build new restaurants in both urban and suburban markets.

It said it is working on a new operating model expected to debut later this fall that combines, quick service, full service and delivery “to provide an entirely new dining experience,” according to a press release.

 

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