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As for the remainder, the price just became too high.įocus isn’t looking for a certain number of brands to add either. For half of those potential transactions, the company backed out after doing its due diligence. “We're looking for the right size, right category, and price,” Holthouser says.ĭixon says there were a number of bidders for every brand that went up for sale in the past year, and he estimates Focus was heavily involved in four to six of them. The candidate doesn’t have to be already franchised-just franchisable. He believes anything over 1,000 units would take the company off task and create issues with integration. Focus wants concepts that are proven in the marketplace, but at the same time, Holthouser says there is such a thing as being too big. Ideally, the brand would be between 150 to 900 stores systemwide. Instead, M&A exploration will potentially center around chicken, burgers, pizza, salads, or maybe even Mediterranean. The eighth concept, whenever that day may come, will round out what Holthouser calls “the flavors of Focus.” In other words, the company is not directing its attention toward any brand that would cause redundancy in terms of cuisine. We can start creating value like this from day one.” We've made huge investments in supply chain. “We can now sell your brands with, I will argue, one of the best development organizations in the restaurant industry. “We can hook you up into this best-in-class app and website,” he adds. Now that we've collapsed all of our guests into one database, start making some of those 14 million available to another brand.” “You can take a brand, especially a brand without scale, and start plugging them into what we call value engines. “I think increasingly, we're starting to look at Focus as more of a platform company,” Holthouser says.
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The company is currently testing a new digital platform that will be implemented across all seven chains, which will not only increase consistency and spread costs, but also makes it easier to onboard additional restaurants in the future. Internationally, the company sold more than 225 units in 2021 and opened more than 215 locations. This includes Jamba by Blendid, a fully automated kiosk being tested on multiple college campuses. The group has nearly 1,000 nontraditional outlets, with another 270 in the pipeline. Also, McAlister’s announced it’s on track to become a $1 billion brand by 2024, which would be a first for any of Focus’ restaurants. Auntie Anne’s, alongside Jamba, opened its first drive-thru, and signed deals for 33 more co-brand locations across the country. Focus sold a record 561 franchises last year and opened more than 175 stores in the U.S. In 2001, Roark purchased Carvel, followed by Cinnabon (2004), McAlister’s (2005), Schlotzsky's (2006), Moe’s (2007), Auntie Anne’s (2010), and of course, Jamba (2018).Įntering 2022, the company is performing as well as it ever has. READ MORE: Why Has Restaurant M&A Activity Slowed Down in 2022?įocus Brands’ story dates back more than 20 years. “It's a very competitive market to buy something, but between ourselves internally, with Roark’s help, we're always looking for what's available in the market,” the executive says. umbrella company CKE Restaurants.ĬFO Mike Dixon says the company has been active since its $200 million purchase of Jamba in 2018. I think if nothing else, it's just going to accelerate just simply because, how do you afford the tools we're talking about or the world-class supply chains or anything else that you need to compete?”įocus promises to be an important part of that M&A future, especially with the backing of private equity group Roark Capital-the same company that oversees Sonic and Arby’s parent Inspire Brands and Hardee’s and Carl’s Jr. “There’s power in a portfolio because of its scale,” Holthouser says. His prediction is that in the next decade or so, there will be the emergence of five to 10 mega players. Jim Holthouser, CEO of Focus, the parent of Moe’s, Jamba, Auntie Anne’s, Cinnabon, Carvel, Schlotzsky’s, and McAlister’s, believes consolidation in the food and beverage space is only going to gain momentum.
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There’s also Jack in the Box’s $575 million purchase of Del Taco and BurgerFi’s $156.6 million buy of Anthony’s Coal Fired Pizza & Wings. FAT Brands won in terms of frequency, with four acquisitions ( Global Franchise Group, Fazoli’s, Twin Peaks, Native Grill & Wings) valued at roughly $892 million.
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Restaurant Brands International topped the list with its $1 billion purchase of Firehouse Subs. However, as 2021 proved, a lot of other brands felt the same way. Coming out of the pandemic’s early days, Focus Brands-equipped with a strong balance sheet-saw an industry ripe for M&A, CFO Mike Dixon says.