Mercato Partners, a Utah-based private equity firm, on Thursday said it has created a new $90 million fund designed to back promising upstart restaurant concepts.
Mercato Partners founder Greg Warnock partnered with Andrew Smith, the former CEO of the restaurant operator Four Foods Group, to create Savory Fund I. The fund is designed to provide access to growth capital as well as access to a team of more than 50 industry veterans who can guide upstart concepts.
Those veterans have expertise in real estate selection, project management, recruiting, training, supply chain, accounting, financial planning, sales and marketing and other areas. “Both capital and expertise are essential to create lasting value in the restaurant industry,” said Smith, Savory’s managing partner.
He said Savory’s approach is to identify where customers have picked winners, provide capital to rapidly expand the concept while preserving the brand’s uniqueness, and provide founders with a support team to go “beyond advice and coaching.”
Savory’s current portfolio includes concepts Mo’Bettahs, R&R BBQ and Swig—concepts that had been part of Four Foods. Savory says its concepts have been able to grow 40% annually, and “profitably,” despite the current crisis.
“The restaurant industry carries an undeserved reputation among certain investors for business risk and razor-thin margins, giving rise to market inefficiency and opportunity,” Warnock said in a statement. “A differentiated brand with several profitable locations and years of consumer loyalty offers a compelling risk-return profile for investors.”
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