Fat Brands Inc. is shopping for burger chain Johnny Rockets Group Inc., increasing its secure of restaurant manufacturers in a guess that casual-dining demand will bounce again from the coronavirus pandemic.
The Beverly Hills, Calif.-based firm mentioned Thursday it could pay about $25 million for Johnny Rockets, widening its holdings to about 700 places throughout 9 chains when the deal is accomplished subsequent month.
Eating places throughout the nation are operating with restrictions on account of the pandemic. Many have added outdoor seating or expanded takeout operations to make up for gross sales in closed or vastly diminished eating rooms.
Including to their challenges are larger labor prices and bills for cleansing and protecting tools. Many unbiased eating places are closing for good.
Nonetheless, restaurant operators and food-service distributors say persons are returning to restaurant fare after months cooking and sheltering at dwelling. Fats Manufacturers Chief Government Andy Wiederhorn mentioned the deal for Johnny Rockets displays his expectation that prospects will come again to casual-dining chains after the pandemic subsides. Already, he mentioned, gross sales have jumped in some markets due to out of doors seating and supply.
“If working from dwelling turns into a much bigger part of day by day life, that simply provides to the demand to have the ability to socialize ultimately,” he mentioned in an interview.
He mentioned Fats Manufacturers would contemplate bringing extra casual-dining manufacturers right into a portfolio that additionally contains Fatburger and Hurricane Grill & Wings. By shopping for regional chains, Fats Manufacturers can acquire scale and negotiate higher offers for promoting and provides, Mr. Wiederhorn added.
“There is a chance now to take informal eating chains and get a consolidation of comparable ideas,” he mentioned.
He mentioned Fats Manufacturers expressed curiosity in Johnny Rockets when Solar Capital Companions Inc. began a gross sales course of for the corporate in January. That course of was placed on maintain when the pandemic took maintain within the U.S., however deal talks reignited in the summertime.
Fats Manufacturers accomplished a financing spherical of $40 million in March that provides it capital to pursue extra offers. Since going public in 2017, the corporate has acquired Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, amongst different chains.