Las Vegas-based Capriotti’s Sandwich Shop acquired Atlanta-based Wing Zone, a fast casual concept with 31 locations across the U.S. offering made-to-order chicken wings. The deal was announced early January and terms were not disclosed. The merger creates a company that attained more than $100 million in sales in 2020 in 150 markets worldwide, according to a press release. As part of the deal, Capriotti’s CEO Ashley Morris will become head of Wing Zone, which launched in 1993. Sandwich chain Capriotti’s has 115 restaurants and opened its first corporate ghost kitchens in 2020. Both brands plan to boost off-premises business in 2021.
FAT Brands merged with its largest shareholder, Fog Cutter Capital, in a corporate restructuring that removes restrictions and allows the parent of Johnny Rockets, Fatburger plus seven other brands more options to purchase franchises in 2021, said CEO Andy Wiederhorn. "It takes off all the handcuffs we had in place at the time of our IPO," in 2017, he told Franchise Times. Fat Brands bought Johnny Rockets last August in a deal Wiederhorn called "transformational" for the company. "I fully expect that we will make at least two acquisitions in 2021 and I think one will be on the scale of Johnny Rockets," he said.
Vertically integrated cannabis operator Item 9 Labs finalized its merger agreement with Colorado-based franchisor One Cannabis Group and expects to close January 2021. One Cannabis is the parent company to cannabis dispensary franchise Unity Rd, which planned to merge with Cannabis One Holdings last year but failed after regulatory hurdles. Unity Rd expects to open its first store in quarter one of 2021 and has franchise agreements signed to develop more than two dozen shops in the U.S. "The merger with One Cannabis Group greatly enhances our business capabilities with its retail distribution and unique franchise operation,” said Item 9 Labs’ CEO in statement. “Their business model and national network of Unity Rd. franchise partners create highly predictable, recurring revenue streams."
Saladworks’ parent company, Centre Lane Partners, acquired Garbanzo Mediterranean Fresh and Frutta Bowls and is forming a new holding company called WOWorks under which all three brands will exist. In 2020, Saladworks grew by more than 40 restaurants, with 80 percent of them opening in non-traditional spaces such as ghost kitchens and food trucks, bringing Saladworks to more than 100 locations. The Saladworks team will take over both brands' operations and infrastructure, while Garbanzo’s current CEO James Park will stay on for a month following the acquisition as a special adviser to CEO Kelly Roddy. The newly formed WOWorks will market its brands as part of a healthy, active lifestyle geared toward millennials and GenZ.
JM Family Enterprises subsidiary Home Franchise Concepts entered into an agreement in December to acquire family-operated Kitchen Tune-Up, a franchise company offering affordable kitchen updates with 135 franchisees in 202 territories in the country, bringing the reach of Home Franchise Concepts up to 1,700 franchise territories in the U.S., Canada and Mexico. The deal marks the fifth brand in the Home Franchise Concepts portfolio—including Budget Blinds, Tailored Living featuring PremierGarage, Concrete Craft and AdvantaClean—and will provide Kitchen Tune-Up with expanded support in operations, technology and marketing. Heidi Morrissey, president of Kitchen Tune-Up since 2017, will retain her role following the acquisition.
Luby’s is selling 13 of 24 remaining Fuddrucker’s restaurants to Black Titan Holdings, controlled by Nicholas Perkins, CEO of Perkins Management Services. The sale is expected to close mid-March, and Black Titan Holdings will operate as a franchisee of the 13 units. When Luby’s announced the refranchise deal—which is part of Luby’s plan to liquidate assets and distribute revenue to shareholders—it said it expects to generate between $93 million and $128 million, but other details were not disclosed.
Education-focused fitness franchise Sasquatch Strength bought out its private equity partner, The Franchise Founders Group, in December to prepare for national expansion in 2021. Sasquatch, founded in 2014 and franchising since 2018, plans to sign deals for 14 new locations this year, a lofty goal for a concept that just opened its first franchise location in 2020. With four gyms in the Seattle metro area, Sasquatch has already signed a deal in Orlando. “We are so grateful to The Franchise Founders for their support and guidance in our early stages of franchising,” said Sasquatch founder and CEO Isaac Vaisberg in a statement. “They have been so critical to our success and we are very excited to keep them on our team as a minority partner.”
Private-equity firm the Halifax Group announced in December its plan to invest a majority stake in Papa John’s largest franchisee, PJU Holdings (Papa John’s United), which has 194 locations in 10 states. The Halifax Group previously invested in PJU from 2007 and 2013 and is reinvesting for an undisclosed amount. PJU, previously a portfolio company of TPG Growth, has been a Papa John’s franchisee for 29 years and operate restaurants in Alabama, Florida, Georgia, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah and Virginia.
Great West Hospitality sold 13 Taco Bell restaurants in Iowa, Nebraska and Wisconsin to an existing franchisee, Haza Foods, led by Ali Dhanani. The deal was announced December 1 and Unbridled Capital provided sell-side advisory. Haza’s portfolio includes more than 245 restaurants and is one of the largest Wendy’s franchisees in the system. Haza is a subsidiary of The Dhanani Group, a billion-dollar QSR franchise development group headquartered in Sugar Land, Texas that operates about 850 restaurants including Burger King and Popeyes.
Hometown Folks, led by Gordon and Elliot Davenport, sold 23 Burger King restaurants in Tennessee to Hometown Hospitality. Hometown Folks formed in 2003 when Gordon and Elliot decided to buy the Burger King restaurants in the Chattanooga area from a Chicago-based franchise owner at the time. Unbridled Capital provided sell-side advisory services and announced the acquisition January 8, marking Unbridled’s 12th deal closing since the start of COVID-19.
Neighborly acquired Precision Door Service, a garage door repair and installation franchise headquartered in Titusville, Florida. The deal was finalized December 31 and marked Neighborly’s fifth service brand acquired during 2020. Precision Door Service was founded in the 1980s by Brian Tindall, who will become a franchisee following the acquisition. Precision Door Service’s more than 100 locations across the U.S. will grow Neighborly’s reach to 28 brands with more than 4,500 franchises.
Driven Brands Holdings announced the launch of its proposed initial public offering of 38 million shares of its common stock, expected to be between $17 and $20 per share filed with the SEC. Driven Brands, headquartered in Charlotte, North Carolina, also plans to grant underwriters the chance to purchase up to 5.7 million additional shares of common stock for a 30-day period, which if exercised, the company intends to use a portion of the net proceeds to acquire shares from its existing stockholders. Morgan Stanley & Co., BofA Securities and Goldman Sachs & Co. are acting as the joint lead book-running managers for the offering.