Fast-growing fast-casual concept Velvet Taco has a new owner in Leonard Green & Partners, which acquired a majority stake in the chain from L Catterton, the company announced Tuesday.
L Catterton, which has had a relationship with Velvet Taco since 2016, will remain an investor in the brand along with the chain’s founder, FB Society (formerly Front Burner Restaurants).
“L Catterton has been a tremendous partner through this chapter of our growth, and we are excited to have them remain a part of the Velvet Taco family going forward,” Clay Dover, the chain’s president and CEO, said in a statement.
Details of the transaction were not disclosed.
The majority stake from Leonard Green & Partners will aid the chain “as we embark on this next phase of Velvet Taco’s national expansion.”
Velvet Taco, known for its inventive menu items, has nearly 30 locations in Texas, North Carolina, Georgia, Illinois, Tennessee and Oklahoma. The Dallas-based chain has more than doubled its footprint over the past two years and said it plans to add more than 10 restaurants by the end of next year.
“We are proud of what Velvet Taco has become since we initially invested five years ago,” L Catterton Partner Chris Roberts said in a statement. “We are excited to welcome LGP to the family and look forward to supporting Clay and the Velvet Taco team as they bring their unique concept to more and more guests across the country.”
Private equity firm Leonard Green & Partners is currently an investor in Union Square Hospitality Group and Zaxby’s, as well as a number of retailers and other companies. The firm was an early backer of Shake Shack.
Velvet Taco was founded in 2011 by former Front Burner Restaurants CEO Randy DeWitt.
The concept’s menu highlights a creative Weekly Taco Feature, which varies by restaurant. A recent offering was a Turducken taco with roast turkey, duck gravy, chicken skin, warm herbed goat cheese potato salad, cranberry sauce and micro celery on a flour tortilla.
Velvet Taco’s growth has been fueled by its unconventional real estate strategy, which allows it to open restaurants in diverse locations such as former gas stations and previous chain locations.
“It’s not a cookie-cutter brand,” Dover told Restaurant Business in April.
The chain recently added some new store designs, including order-ahead drive-thrus that were seeing a 25% boost in high-ticket digital orders. The brand is also exploring a prototype without a dining room.
"Velvet Taco has established itself as a leader in the fast-casual restaurant category with its innovative, culinary-driven concept and we believe the company is extremely well-positioned for growth and expansion," said Evan Hershberg, partner at Leonard Green, in a statement. "We are excited to build on the Company's significant momentum and strengthen its brand leadership across the U.S."
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