Nation's Restaurant News On the Go Newsletter #23
Nation's Restaurant News
The #1 source of news and business intelligence for restaurant and foodservice industry professionals
Big deals
Ron Ruggless here, senior editor with Nation’s Restaurant News, this was a big week in restaurant merger and acquisition news.?
After months of moribund merger moves, the restaurant industry’s spell was broken by Olive Garden parent Darden Restaurants Inc. — and in a big $715 million way — with its all-cash offer for Ruth’s Hospitality Group Inc., parent to the 154-unit Ruth’s Chris Steak House brand.?
If the deal is completed, as expected, in June, the merged Florida-based companies — the 1,890-unit Darden is based in Orlando and Ruth’s Chris is based in Winter Park — will give Darden more fine-dining presence to complement its existing 61-unit Capital Grille and 29-unit Eddie V’s. Darden owns and operates a wide variety of brands, from LongHorn Steakhouse and Cheddar’s Scratch Kitchen to Seasons 52 and Bahama Breeze.?
Another restaurant deal is waiting in the wings. Milford, Conn.-based Subway, which put itself up for bids in earlier this year, continues to work with its suitors, though no transaction has been reached. Meanwhile, the sandwich brand continued to roll out new and upgraded sandwiches this week with the debut of six more options in its Subway Series.?
And my colleague Joanna Fantozzi looked at the CEO succession at Beverly Hills, Calif.-based Fat Brands, the acquisitive company that has added a number of smaller brands over the past few years. Andy Wiederhorn, under federal investigation, stepped down as CEO, and Fantozzi looked at the challenges facing the new co-CEOs, Ken Kuick and Rob Rosen.
Olive Garden parent Darden to acquire Ruth’s Chris in $715M deal
Olive Garden parent Darden Restaurants Inc. has entered into an agreement to acquire the 154-unit Ruth's Hospitality Group Inc. in a deal valued at about $715 million, the companies said Wednesday.
Orlando, Fla.-based Darden, which also owns the LongHorn Steakhouse and Cheddar’s Scratch Kitchen brands among others, said it will commence a tender offer of $21.50 a share for Ruth’s shares in an all-cash transaction.
Subway adds to its Subway Series menu
Subway has announced the first update to its Subway Series menu since its launch in July 2022, including the addition of new sandwiches and upgraded sandwiches. The Subway Series now includes 18 selections, versus 12, and double the cheese.
Four classic sandwiches are joining the lineup, including Sweet Onion Teriyaki, Italian B.M.T., Chicken & Bacon Ranch and Spicy Italian.
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Can FAT Brands’ two new CEOs outrun the company’s financial and legal troubles?
Less than two months after former FAT Brands CEO Andy Wiederhorn announced that he was stepping down from his role as head of the company in connection with an ongoing federal investigation, the Fazoli’s and Johnny Rockets parent company announced his two successors. ?Co-CEOs Ken Kuick and Rob Rosen will helm FAT Brands moving forward, while maintaining their respective roles in the company as chief financial officer and executive vice president of capital markets.
Meanwhile, Wiederhorn is continuing in his role as chairman of the board. He and his family’s company, Fog Cutter Capital, still maintain a controlling interest (55.5%) in FAT Brands, even while they are being investigated by federal authorities on accusations of securities and wire fraud, money laundering, and attempted tax evasion.
‘Resilient’ guests drive strong sales at IHOP, Applebee’s
Dine Brands reported Q1 results Wednesday morning that included a same-store sales increase of 6.1% at Applebee’s and an 8.7% increase at IHOP. These numbers marked the ninth and eighth consecutive quarter of gains, respectively, and exceeded analysts’ expectations on the quarter as their consumer base found favor in the brands’ value offerings and promotions.
Wingstop performance spikes with 20.1% same-store sales growth
Dallas-based chicken wing brand Wingstop’s hot streak continues as the brand reported a 20.1% increase in same-store sales for the first quarter ended April 1, 2023, driven largely by transactions and traffic growth.
Company president and CEO Michael Skipworth said in Wednesday’s quarterly earnings call that double-digit growth across multiple channels is the result of focusing on strategic growth drivers that include improvements in brand awareness, menu innovation, expanding delivery channels, digital transformation, and data-driven marketing. Profitability is also being bolstered by increased supply chain stabilization, particularly lower chicken costs.
Taco Showdown Finalists Announced!
We’ve narrowed it down to two finalists in NRN’s Taco Showdown – Condados Tacos and Torchy’s Tacos. Vote for your favorite here! Voting ends Monday. Read more about our Taco Showdown here.
PODCAST: The latest on restaurant earnings, increases in traffic and virtual brands & Hear from special guest Doug Willmarth, president of MOOYAH Burgers, Fries & Shakes.
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