Financing

Vegan chain Next Level Burger buys Veggie Grill

The move comes less than six months after Veggie Grill closed 12 restaurants amid declining sales. The deal creates a 27-unit plant-based restaurant company.
Veggie Grill
Veggie Grill has been acquired by Next Level Burger. | Photo courtesy: Veggie Grill

Veggie Grill, which closed about 40% of its stores in August amid declining lunch traffic, has been acquired by plant-based burger chain Next Level Burger, the company announced Thursday.

The vegan fast casual had been on the brink of bankruptcy last year when a vegan investment fund called VegInvest took ownership of Veggie Grill. Under Portland, Ore.-based Next Level Burger’s ownership, VegInvest will remain a “mission-aligned shareholder and partner,” the restaurant said in a statement.

Details of the transaction were not disclosed, but a spokesperson said the post-acquisition valuation of the company now exceeds $80 million. The deal creates a 27-unit plant-based restaurant company that Next Level Burger called “the world’s largest” vegan chain.

Next Level Burger co-founder and CEO Matt de Gruyter also becomes CEO of Veggie Grill by Next Level. T.K. Pillan, Veggie Grill’s co-founder and previous CEO, did not immediately respond to a Restaurant Business request about whether he will remain with the company.

“We’re not just writing a new chapter for Veggie Grill—we’re starting a new book,” de Gruyter said in a statement. “Veggie Grill by Next Level will mean all sorts of changes: organic produce, non-GMO ingredients and ensuring living wages for our many team members across the country.”

Favorite menu items will remain, he said, but the acquisition will “maximize hospitality and bring a new level of consistency” to Veggie Grill’s remaining 17 locations in California, Oregon, Washington and Massachusetts, Next Level Burger said.

Founded in 2013, Next Level Burger in 2022 announced a $20 million funding round from several investors interested in vegan foods. At the time, Next Level Burger had nine locations, including six inside Whole Foods Market grocery stores. In announcing the investment, the chain said it intended to quadruple its unit count by the end of 2025.

Both Veggie Grill and Next Level Burger have offered menus largely devoted to plant-based comfort foods like burgers, fries, shakes, mac & cheese, faux chicken tenders and more.

Los Angeles-based Veggie Grill was founded in 2006, becoming one of the first in the plant-based fast-casual segment with its store in Irvine, Calif.

Private equity firm Brentwood Associates, which was the largest shareholder in the concept before VegInvest, began its partnership with Veggie Grill in 2011. That year, Brentwood helped the chain raise $11 million to support its expansion, under the leadership of then-CEO Greg Dollarhyde.

In 2016, Veggie Grill secured $22 million in capital, from a group including Brentwood Associates, a venture capital firm created by Pillan and co-founder Kevin Boylan, and others.

In 2021, Veggie Grill launched sister brand Stand-Up Burgers, a four-unit concept selling only veggie burgers, fries and shakes. But those stores were among the round of closures last year.

At its height, Veggie Grill grew to 35 stores. But growing plant-based competition and the impact of the pandemic hit the concept hard.

“The plant-based sector got, I would say, a little over-hyped a couple of years ago,” Pillan told RB in August. “Now we’re getting normalized.”

For its part, though, Next Level Burgers said it still sees tremendous white space in the plant-based sector.

“NLB remains committed to its long-term goal of opening 1,000 plant-based restaurants from coast to coast,” the chain said in a statement. “This chapter represents an exciting step toward that end.”

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