Roark Capital Group’s FOCUS Brands Inc. will buy Atlanta-based fast casual Mexican chain Moe’s Southwest Grill for an undisclosed price.The deal is expected to close in summer.
News of the possible buy-out was first included in a lawsuit filed March 30 in federal court in Atlanta by 28 franchisees and investors in Georgia, Tennessee and Florida, reported by Atlanta Business Chronicle on April 6. On Wednesday, Raving Brands Inc. Chief Operating Officer Steve LaMastra announced the pending sale to franchisees in a systemwide conference call.
“We looked long and hard to find the right partner to help us take our business to the next stage, and with FOCUS Brands,” LaMastra said in a release.
FOCUS Brands is the franchisor and operator of 1,750 ice cream stores and sandwich shops in the United States and 33 foreign countries. With the addition of Moe’s, FOCUS Brands will have five brands, including Schlotzsky’s, Carvel Ice Cream, Cinnabon and Seattle’s Best Coffee International. Combined, the concepts will generate over $1 billion in annual system-wide revenues through more than 10,000 shops.
Atlanta-based Roark Capital is a private equity firm. Its FOCUS Brands subsidiary specializes in buying franchises with room to grow. It recently bought the Austin, Texas, chain Schlotzsky’s Ltd., a quick casual sandwich restaurant with 365 locations that generate $210 million in system-wide sales.
Moe’s, which stands for Musicians, Outlaws and Entertainers, was founded in 2000 by entrepreneur Martin Sprock. Its meteoric growth captured news and trade magazines’ headlines nationwide. Moe’s now has 345 locations in 36 states, generating nearly $300 million of annual system-wide revenues. In December 2006, Raving Brands reported 125 more stores were in development.
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