Marugame Udon wants to bring its noodles and tempura to the U.S. and now has the help of a private-equity firm to do it.
The Japanese fast-casual chain, which has more than 1,000 locations in Asia, has received an investment from Raleigh, N.C.-based private-equity firm Hargett Hunter. The funds will help Marugame quickly open its noodle chain throughout the country. Terms of the deal were not disclosed.
“As Americans, we’re big fans of pasta and fried food,” said Jeff Brock, managing partner of Hargett Hunter, in an interview. “This is just pasta and fried food under a different name.”
The brand makes its udon noodles from scratch and batters its selection of tempura in front of customers before frying it. Brock said it is “a real confluence of all the traits we put a premium on today.”
Marugame’s U.S. arm is based in Irvine, Calif. The chain operates eight locations in California and Hawaii but plans to expand to 150 by the end of 2025.
The chain is the flagship concept of Toridoll Holdings, a Japanese company that operates 1,700 restaurants and generates about $1.4 billion in annual sales.
Hargett Hunter will work with Toridoll to grow Marugame in the U.S. The firm is assembling a leadership team to develop the brand, first with company locations and then as a franchised model.
It already has two experienced executives in Mark Brezinski and Pete Botonis, who helped grow Pei Wei Asian Diner.
“We believe that this partnership will be instrumental in the development, growth, and globalization of Marugame,” said Takaya Awata, founder and CEO of Toridoll, in a statement. “The funding will help Marugame’s growth in the world’s largest restaurant market, propelled by the increasing popularity of Japanese food and fast-casual eateries in the United States.”
Marugame is creating a new store format as part of its U.S. expansion. Hargett Hunter will support that expansion by identifying growth markets for both franchise and company-owned stores.
Brock believes there is plenty of interest in the U.S. for a udon noodles concept. He noted that ramen has become popular, for instance. Udon is similar, he said, though it is “more robust” and more flavorful. “We view udon as ramen’s big brother,” he said.
Still, he added, “from an investment perspective, it has competitive differentiation. There are not any other udon concepts that people know.”
For Toridoll, the partnership with Hargett Hunter gives it an investment partner who knows the U.S. market and can help it ramp up here. “They’ve given us a little insight in how the brand can position and be successful in the U.S.,” Brock said.
It’s difficult to develop an international brand in the ultracompetitive U.S. But Brock said the brand’s California and Hawaii locations gave Hargett Hunter some confidence that its stores will work well here.
Brock said the plan is to expand Marugame to Texas, a market that has a lower cost of doing business but still has a diverse population. In addition, Brock said, chains such as Pei Wei did well there.