High Bluff Capital Partners, the private-equity firm that just bought Quiznos, has acquired the Mexican fast-casual chain Taco Del Mar.
Terms of the deal were not disclosed, but the sale puts both struggling franchised chains under a single owner, making it the latest in a growing number of investment firms that see an opportunity in collecting concepts that are in decline.
“We see tremendous opportunity to continue to build out our platform in the mid-market restaurant franchise segment, which has many regionally strong concepts with significant growth potential,” Gerry Lopez, operating partner at High Bluff, said in a statement. “Our approach is grounded in identifying brands that enjoy strong relationships with consumers that can benefit from the type of targeted capital, scale, management, expertise and focus on innovation we bring to bear.”
Taco Del Mar operated 87 U.S. locations in 2017, according to Technomic data, down 11% from the year before, while system sales declined 9.3% to $58.7 million. The company also operates 41 locations outside of the U.S.
Average unit volumes at the chain increased 1.6% last year to $635,000.
All of its locations are franchised, making the company much like Quiznos, which High Bluff acquired a month ago, and which has lost about 90% of its U.S. units over the past decade. It operates just more than 400 locations domestically to go along with 300 international restaurants.
But High Bluff clearly sees an opportunity in operating multiple chains together, similar to strategies being put together by the owner of Romano's Macaroni Grill as well as GP Investments, the new owner of Bravo Brio Restaurant Group. The latter company has formed FoodFirst Global Restaurants, with plans to acquire additional concepts.
Fatburger owner Fat Brands, meanwhile, has acquired Ponderosa and Hurricane Grill & Wings with plans to develop all of its brands internationally.
Taco Del Mar opened its first location in Seattle in 1992. Lopez says that Taco Del Mar has a “popular Baja lifestyle positioning and well-established heritage in the Pacific Northwest.”
He said that the company has “an excellent foundation” as it uses its platform to support franchisees and develop and introduce “fresh concepts that resonate with today’s consumers and broaden the brand’s appeal.”