Big Taco Bell Franchisee Gets Bigger
Acquisitions in the franchise business appear to be picking up again. Altamont Capital Partners, the San Francisco-based private equity firm, said this week that it has purchased Austaco, an 80-unit Taco Bell operation based in Texas.
Austaco will become part of the Altamont-owned Tacala LLC, which will be the largest franchisee in the Taco Bell system, with 250 locations, following the acquisition.
Franchisee consolidation is a big trend in the restaurant business, as some owners retire and seek to sell, and others seek the exits amid rising costs and a belief that bigger is better among restaurant operators.
Private equity groups have been eager buyers, because franchisees of legacy brands are relatively low-risk businesses that generate considerable cash. Taco Bell is considered a prime target for investors because it has relatively little national competition in the market for QSR Mexican food.
"We have seen firsthand the industry-leading product innovation and marketing capabilities of the Taco Bell brand," Altamont Managing Director Randall Eason said in a statement. He noted that Austaco is a perfect fit with Tacala, and gives the company more development opportunities going forward.
Tacala is based in Birmingham, Alabama, and operates Taco Bells throughout the Southeast. It also operates Boom Foods, a Sonic franchisee with restaurants in Alabama, Georgia, Tennessee and Virginia.