Inspire Brands may be going public

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3 Numbers

$20 billion

Possible value of Inspire Brands, which is said to be considering an initial public offering. Bloomberg?reports that the Roark Capital-backed restaurant holding company — which owns Dunkin’, Arby’s, and Jimmy John’s, along with other chains — could go public in late 2024 or early 2025. A $20 billion market cap would make Inspire the fifth-largest public restaurant chain in the world.

$5 billion +

Possible value of the Flynn Group, which Reuters reports is seeking a majority stake sale. Flynn has grown to be an enormous franchisee — the world’s largest — operating over 2,600 restaurants and fitness clubs and grossing over $4.5 billion annually. It franchises Applebee’s, Panera, and Planet Fitness, among other brands.

$6.8 million

Shake Shack’s Q4 net income, which helped the company’s stock skyrocket 26% on Thursday. The company ended the year strong, reporting a 2.8% same-store-sales increase and growth in restaurant-level operating margins.

What’s In the News

Restaurant Brands International —?which owns Burger King, Tim Horton’s, Popeyes, and Firehouse Subs — reported a strong Q4, with same-store-sales rising at all of its brands in the quarter.

RBI announced last month that it will purchase Burger King’s largest franchisee, Carrols Restaurant Group, for $1 billion, with an aim of refranchising the stores into the hands of smaller operators. Why? Said RBI CEO Josh Kobza:

“We see first-hand the benefits of being a smaller operator,” he said. “The numbers speak for themselves. Operators with less than 50 restaurants have 51% modern image and delivered average franchisee profitability of $15,000 per store above that of franchisees in the 50-plus restaurant group in 2023. Not surprisingly, they're also generally better capitalized.”

In general, the focus on franchisee profitability seems to be paying dividends: RBI reported that average annual profitability rose 50% from a year ago to $205,000 in 2023.

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Mega asset manager Blackstone announced a growth equity investment in the concept concept 7 Brew, which has grown from 9 to nearly 200 units over the past three years. Jimmy John’s founder Jimmy John Liautaud sold his 7 Brew shares as part of the transaction.

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Inspire Brands?purchased Vromo, a delivery service platform. Terms of the deal were not announced.

It’s been a minute since a high-profile restaurant operator has acquired a tech company, but the strategy was deployed twice by Yum Brands in 2021, when it bought analytics firm Kvantum and ordering platform Tictuk Tech. Yum company execs have since said that acquiring the companies accelerated the development of its tech stack.

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McDonald’s Snack Wrap aficionados aren’t the only people craving its return — McD’s franchisees also want it back.

Restaurant Business?reports that the National Owners Association, a large independent group of McDonald’s operators, recently wrote a letter to the corporate office detailing why the Snack Wrap is poised for a comeback:

“McDonald’s created the Snack Wrap as a value offering and now many QSR competitors are promoting them while McDonald’s has removed them from the menu,” the association said. “Snack wraps are craveable, relatively simple to produce, would require only a couple new menu items on the prep table and could easily satisfy the call for more affordable options on the menu. Let’s bring them back!”

RB’s report is worth reading in full — the NOA’s letter also gives insights into franchisees’ positive feelings toward the CosMc’s concept, its 2024 concerns, and other details.

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Toast?announced this week that it’s laying off 550 employees, a 10% reduction in force, as the company aims to achieve operating profitability by the first half of next year.

Toast’s Q4 earnings were actually better than analysts expected — year-over-year revenue increased by 35%, and the company’s net loss narrowed from $96 million to $36 million. 106,000 restaurants now use the platform.

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Tired: Press releases announcing new menu items.

Wired: Taco Bell holding an Apple-style keynote to unveil its 2024 menu.

Last week in Vegas the chain livestreamed a (high-energy) conference that featured musical acts, awards, and announcements of a slew of new menu offerings, including:

• Crispy Chicken Nuggets
• Cheesy Street Chalupas (which I choose to read as Chalupas from a place called Cheesy Street)
• The Baja Blast Gelato and Pie

Take a look here.

Name That Chain!

You’ve got three guesses to name this week’s mystery chain:

• This chain’s founder grew up in a large Amish Mennonite family, which helped inspire the brand’s name
• The first location was at a Pennsylvania farmer’s market; today, most locations are in malls
• Signature item flavors include sweet almond, pepperoni, and cinnamon sugar

Last issue’s answer: Sbarro

#Content Recs

• Ghost kitchens may still be picking up the pieces after 2020’s boom gave way to a 2023 bust, but what they’ve evolved into is arguably more interesting.
• Butter chicken: Creamy. Delicious. Current subject of India’s highest-profile court case.
• After watching the extended cut of the DunKings ad… I have no notes. They crushed it. Congrats to Dunkin’ and the entire New England area.
• The Economist’s?Big Mac Index — which compares countries’ currencies using Big Mac prices as proxies — got a big update in January.
• Modern life is great because you can just get a credit card and experience splendors that would make Babylonian kings weep. Anyway, here’s a video showing how Royal Caribbean’s Icon of the Seas?feeds 10,000 people in the cruise ship’s 40 restaurants.

‘Member When?!

This week, we’re talking about the Burger King Kid’s Club. Here’s their introduction, in what some people have called “the most 1990 commercial ever made”:

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