Fazoli’s decided to put itself up for sale in April, about six years after being acquired by private equity firm Sentinel Capital Partners, CEO Carl Howard said Tuesday.
About seven months and many “Zoom calls and live meetings” later, the Italian fast casual found a new owner in restaurant chain collector Fat Brands, Howard said. The owner of Fatburger, Johnny Rockets, Twin Peaks and Round Table Pizza parent Global Franchise Group agreed to purchase the 216-unit chain for $130 million.
Fazoli’s will remain based in Lexington, Ky., with all of its executive team and corporate staff staying intact.
“We will find other synergies and collaborations as it relates to supply chain and buying partners, even development,” Howard said, noting that Fazoli’s franchisees may be interested in Fat Brands’ concepts and vice versa.
“I think that’s an exciting part as well,” he said.
The chain’s strong performance throughout the pandemic made it attractive to buyers, Howard said. Fazoli’s said it has seen two-year same-store-sales growth of 28.1%, based largely on traffic driven by the popularity of value offers it launched during the crisis.
A five-items-under-$5 menu helped boost sales, as did a successful Super Family Meal that appealed to quarantining pods.
“We went and accelerated the amount of advertising we’ve normally done,” Howard said. “Our food travels well. The pandemic forced people to use brands they may not have used in the past.”
The chain also launched Wingville, a virtual wing concept, during the pandemic.
“Wings were so popular for us, we now sell more wings through Fazoli’s website than we do our virtual website,” Howard said.
Fazoli’s is also testing a virtual mac and cheese concept, Macaroniville, in nine locations. The chain is waiting for labor conditions to improve before rolling it out to more stores, he said.
Fazoli’s intends to open about a dozen new locations by the middle of next year, for a total of up to 25 restaurants in 2022.
Howard said he expects to have a fruitful partnership with Fat Brands.
“We both have the same focus and that’s growth,” he said. “Not only topline but new unit development … This gives us a little more leeway to invest in a longer-term strategy and grow out the development pipeline.”
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