Financing

Inspire Brands sells Rusty Taco to the owner of Cicis Pizza

The owner of Arby’s and Dunkin’ decided that the taco chain would be better off in the hands of a company that operates emerging brands.
Rusty Taco sold
Rusty Taco has been sold to the investment firm Gala Corp. / Photo courtesy of Rusty Taco/Inspire Brands.

Rusty Taco was apparently too small for Inspire Brands.

The Atlanta-based owner of giant chains Dunkin’, Arby’s and Sonic on Monday announced that it has sold the smallest of its six chains to Gala Corp., arguing that it would be better off in the hands of an operator more experienced with emerging chains. Terms of the deal were not disclosed.

“Inspire’s tightly integrated shared services model is optimized for brands at scale, and all our scaled brands have ample runway for continued growth,” Christian Charnaux, chief growth officer for Inspire, said in a statement. “Therefore, we concluded that an owner focused on emerging brands would be the best partner for Rusty Taco’s next chapter of growth.”

It found a buyer in Gala Corp., the Southern California investment firm that either owns or has invested in Cicis Pizza, Mooyah Burgers, Fries & Shakes and Dunn Brothers Coffee. It acquired the latter chain earlier this year.

Anand Gala, the founder of Gala Corp., said in a statement that “there’s fantastic opportunity right now” for Rusty Taco, noting that the brand “offers competitive unit-level economics and investment returns, has manageable operations and is in a dining segment that’s on-trend, growing, and lacks strong competition.”

Inspire Brands was created in 2018 when Arby’s acquired Buffalo Wild Wings. The company has since gone on to engineer deals for several other big brands, including Sonic, Jimmy John’s and most recently Dunkin’. It’s one of the largest restaurant companies in the world.

But when it acquired Buffalo Wild Wings, it inherited Rusty Taco, a small growth chain the wing concept had initially invested in back in 2014.

Inspire kept Rusty Taco and focused on its growth. The company said system sales have increased 50% since the acquisition and that its newest restaurants have set new opening sales records. Rusty Taco finished 2021 with 37 locations, all but four of them franchisee-owned. System sales neared $36 million.

But that’s also a fraction of the size of Inspire’s other brands, all of which generate at least $2 billion in global system sales.

Inspire Brands provided “support and resources that propelled our national footprint, accelerated our growth, and drove increased [average unit volumes and success across our four dayparts,” Denise Fenton, brand director and cofounder of Rusty Taco, said in a statement.

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