Financing

The former CEO of Famous Dave's is making a play for Rubio's and BurgerFi

Jeff Crivello has been buying up brands like Cowboy Jack's this year. He is now turning to the two struggling fast-casual chains after acquiring their debt, giving him a good chance to buy both.
burgerfi
Crivello's TREW Capital is the lender for BurgerFi, which is exploring strategic alternatives. | Photo: Shutterstock.

Jeff Crivello is not done with the restaurant business.

The former CEO of Famous Dave’s has been on a buying spree in recent months and acquired the Minneapolis-based casual-dining chain Cowboy Jack’s in March. But now he’s making a play for two other brands: Rubio’s and BurgerFi.

Crivello’s TREW Capital Management has acquired the debt for both companies, which are struggling and looking for buyers. As the holder of that debt, Crivello could end up with both companies by exchanging that debt for equity in the business, a debt-for-equity transaction.

TREW acquired the debt from Rubio’s lender, Golub Capital, in March. Rubio’s filed for bankruptcy on Wednesday with $70.7 million in senior debt, according to court documents.

Rubio’s struggled coming out of its first bankruptcy, in 2020. It had negative EBITDA, or earnings before interest, taxes, depreciation and amortization, of nearly $17 million in 2022 and 2023 and so far this year has $3.3 million in negative EBITDA, according to court filings.

The fast-casual taco chain began looking for buyers in January. Nobody came forward. The company shuttered 53 total locations in May, including 48 that were shut down abruptly late last week. It hopes a bankruptcy process can attract more potential buyers because the court process can get rid of leases for underperforming locations. The smaller company could be more profitable as such.

TREW is also the debt holder for BurgerFi, the struggling owner of its flagship fast-casual chain along with Anthony’s Coal-Fired Pizza. TREW is loaning BurgerFi $2 million to help get that company through the strategic review process, as is the private-equity firm L Catterton.

Crivello guided Famous Dave’s until its 2022 sale to the Canadian brand collector MTY Food Group.

His tenure at Famous Dave’s was loaded with acquisitions, with low-priced deals for brands like Village Inn, Granite City, Bakers Square and Tahoe Joe’s, turning a single-concept company into a seven-chain operator.

Crivello is doing something similar with a company called Ciao Hospitality Group, which operates Cowboy Jack’s and The Barn at Cowboy Jack’s, which he acquired in March. The brand also operates Sally’s Saloon, a pub near the University of Minnesota, and Berry Divine Acai Bowls.

By acquiring the debt on both BurgerFi and Rubio’s, Crivello is deploying a “loan-to-own” strategy, buying loans at a discount on the secondary market. That can give buyers control of the sale or bankruptcy process and can enable them to convert the full value of that debt to equity and effectively buy the chain.

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