Recent dealmaking indicates middle-market private equity firms are hungry for burger chains.
Baja Fresh Mexican Grill CEO David Kim’s newly formed investment firm, Growth Concepts, is the latest to take a bite out of the burgeoning better-burger concept with the Tuesday announcement that it acquired the units of Canyons Burger Co. The purchase price was not disclosed.
Canyons is known for its black Angus burgers and, according to the Nation’s Restaurants News, has an averaged check of $8.50 along with an average unit volume of just $850,000.
According to a press statement, the purpose of Kim’s new firm “is to discover and develop today’s hot new restaurants into tomorrow’s strategic brands.”
“We knew we’d need a strong horsepower behind us,” one of Canyons’ founders Nick Binnings told Nation’s Restaurant News. “No one’s going to buy in to some young guys’ brand without that platform behind us. But I think now that Baja Fresh is involved, it’s really going to open doors.” The chain is planning franchising additional units.
However, Canyons is not the only chain cooking up such a business model and using private equity as part of the recipe.
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