McDonald's Ex-Boss Scoops Up PizzaRev, BWW Is Out
Cleveland Avenue, helmed by former McDonald's CEO Don Thompson, has acquired a majority stake in PizzaRev.
PizzaRev has landed a majority investor, and it’s a big name—Cleveland Avenue based in Chicago, a new venture capital firm founded in January by Don Thompson, McDonald’s former CEO who retired from the Golden Arches in March 2015.
“This is more than an investment, this is a partnership,” Thompson said in a statement, but PizzaRev declined requests for interviews with him and with PizzaRev co-founders. “At this time, we aren’t disclosing more than what is in the press release,” emailed Monica Rutkowski of PizzaRev. Left out of the press release, oddly enough, was any mention of Thompson’s pedigree.
After the transaction, Buffalo Wild Wings is out of the choose-your-own-ingredients pizza brand. BWW bought a minority stake in PizzaRev in 2013, and CEO Sally Smith told Franchise Times at the time she made the investment to get a piece of a young franchise with promise. “I need to get there before private equity does,” Smith said in an April 2014 article. “We are investing in emerging brands so in three to five to seven years we have a growth vehicle.”
BWW opened three PizzaRev stores with much fanfare in the Minneapolis area, its hometown, as PizzaRev’s first franchisee, but closed them this May. BWW is the target of an activist investor group, Marcato Capital Management, that called in April for Smith to resign.
Cleveland Avenue, Thompson’s venture capital company, is named after the Chicago street where Thompson was raised, reports Crain’s Chicago Business, which said Thompson started the company “quietly” in late 2015 and enlisted former McDonald’s colleagues for the launch.
Cleveland Avenue’s first original concept is called Drink, a nonalcoholic beverage bar inside an American Eagle Outfitters flagship store in Times Square in New York City. It also invested in HalfSmoke, a Washington, D.C., sausage restaurant.
Starting at McDonald’s in 1990 as an electrical engineer, Thompson was CEO of the corporation for less than three years. He was blamed at the time for troubles at the fast-food chain such as confusing the menu, adding to customer wait times and declining same-store sales.
One of the founders of PizzaRev, Irv Zuckerman, told Franchise Times in April 2014 that he and his partners were gunning to grow quickly in the then-nascent fast-casual pizza business. “Your goal’s gotta be to be the leader. We’re not trying to get bronze,” Zuckerman said.
PizzaRev has more than 200 locations under development across Mexico and 14 states, the company said, with more than 50 units open. Both MOD Pizza and Blaze Pizza report higher and similarly fast-growing numbers.