Anytime we talk with Andrew Smith, the cofounder of the private-equity firm Savory Fund, he makes one point clear. “I don’t buy turnarounds,” he said. “We buy elite brands that are kicking ass.”
So what is Savory doing investing in Hawkers? Didn’t the Asian chain file for bankruptcy last year?
Yes. But that doesn’t make the investment a turnaround.
The Hawkers bankruptcy filing was dismissed in January, largely at the urging of the judge. Not long afterward, the chain contacted Savory and sought a deal. It took just 45 days to put it together, Smith said.
And Smith is as bullish on Hawkers as any deal that Savory has done. The 15-unit chain has strong unit volumes of $4.6 million. It has 4.8-star guest satisfaction scores across the system.
More than half of the chain’s traffic comes from people who visit five or more times a year, with some locations seeing more than half of their customers visit eight times a year. Those are remarkable numbers for a casual-dining chain.
“It’s such a good business,” Smith said. “It’s twice as good as I thought. It does monster AUVs. It has great margins and sales and traffic that are beating the odds.”
So why did the company file? Smith blamed it on “bad advice.”
Hawkers was one of numerous restaurant chains that filed for bankruptcy in 2024, and in reality it was one of the stranger filings.
The company grew system sales by nearly 26% in 2023. Sales grew 8.3% in 2024, according to Technomic, which makes it one of the 500 largest chains in the U.S.
But Hawkers in 2023 needed financing and took out a loan rather than take on an equity investment.
When Hawkers filed for bankruptcy in September last year, it said that it had become clear that the lender was moving to take control of the restaurant chain. But the court judge ordered mediation between the casual-dining chain and the lender, ABC Funding. By December the two sides reached a deal to restructure the debt, paving the way for the case’s dismissal, according to court documents.
The deal with Savory enabled Hawkers to pay off its creditors and return to its previously scheduled growth trajectory.
“The business is clean,” Smith said. The brand did not have to close restaurants or dispose of leases or lay off workers.
“They didn’t have to shed anything,” he said. “It is ready and ripe for growth.”
Hawkers offers a wide selection of dim sum dishes meant to be shared.
Hawkers was founded by four friends, Kaleb Harrel, Allen Lo, Wayne Yung and Kin Ho, in Orlando in 2011, after traveling through Asia and “falling in love with the flavors, textures and spirit of street food culture.”
Hawkers operates a brand with a unique menu full of sharable items in a smaller-plate format, including dishes like Chinese BBQ Pork Baos, Chili Crisp Wontons and Soup Dumplings. “It almost forces social interaction and experience,” Smith said. “We love the vibe.”
The Asian category in which it operates is also primed for growth. Sales at casual-dining Asian chains grew more than 7% last year, outperforming every other menu segment, according to data from Restaurant Business sister company Technomic. By comparison, average casual-dining sales last year grew just 1.3%.
“We built Hawkers on heart, hustle and a hunger to share everything that makes Asian street food special,” Harrell, the company’s CEO, said in a statement. “Over the years, it’s become clear that this brand has the potential to be something bigger than we ever dreamt it could be, and finding the right partner is crucial to that goal.”
The brand has locations in key markets such as Orlando, Washington D.C., Atlanta, Dallas, Charlotte and Nashville. The company plans to double down on these markets almost immediately, Smith said. Existing management will remain with the bbrand.
By canceling its bankruptcy filing, and then doing a deal with Savory, Hawkers gets a chance to accomplish a rare feat. Bankruptcy filings are expensive and costly, and few chains get the opportunity to become true growth brands after taking that step. Most fall into decline.
In this case, the company will get the opportunity to operate under the watchful eye of Savory, which has a proven ability to help guide growth chains to its next stage.
“This is not a company that should be bankrupt,” Smith said. “They withdrew, and I’m glad they did, because now they’ve got Savory as a partner.”
“This one is exciting,” he added. “I feel we took a black eye off a brand that didn’t deserve it.”
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