This edition of MRM's News Bites features Inspire Brands and Sonic, Dunkin', Grubhub and Tagpingo., Taco Bell, Chipotle, Gather, Nacho Daddy and Modern Restaurant Management (MRM) magazine.
Send news items to Barbara Castiglia at firstname.lastname@example.org.
Inspire To Acquire Sonic
Inspire Brands, Inc. will acquire Sonic for $43.50 per share in cash in a transaction valued at approximately $2.3 billion including the assumption of Sonic’s net debt. Inspire's portfolio includes more than 4,700 Arby’s, Buffalo Wild Wings, and Rusty Taco locations worldwide.
The company is majority-owned by affiliates of Roark and was founded in 2018. Since inception, affiliates of Roark have invested in 65 franchise/multi-unit brands, which collectively generate $32 billion in annual system revenues from 32,000 locations in 50 states and 81 countries.
Following the completion of the transaction, Sonic will be a privately-held subsidiary of Inspire and will continue to be operated as an independent brand. The transaction is expected to close by the end of the year.
The agreement, which has been unanimously approved by Sonic’s Board of Directors, represents a premium of approximately 19 percent per share to Sonic’s closing stock price on September 24 and a premium of approximately 21 percent to Sonic’s 30-day volume-weighted average price.
“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” said Paul Brown, Chief Executive Officer of Inspire Brands. “We have tremendous respect for Sonic’s exceptional team of employees and franchise owners, who have built one of the industry’s most distinctive restaurant brands. We’re excited to build on Sonic’s momentum as we leverage our combined expertise and capabilities to better serve guests, further support team members and franchisees and drive long-term growth.”
“This value-maximizing transaction validates the actions we have taken over the last year to grow traffic and improve sales while delivering differentiated offerings and superior guest service,” added Cliff Hudson, Sonic Corp. CEO. “Our Board of Directors, taking into account the views of shareholders, conducted a comprehensive review of a wide range of strategic options to maximize shareholder value. This transaction delivers significant, immediate and certain value to Sonic shareholders, and the private ownership structure will provide important benefits to our guests, franchisees and employees.
“As one of the largest owner-operators of company-owned and franchised restaurant brands, Inspire appreciates the unique culture of collaboration between Sonic and our franchisees. Sonic franchisees are engaged in planning regarding technology, new products and marketing programs, and the team at Inspire recognizes the central role our franchisees have played, and will continue to play, in Sonic’s success. We look forward to working closely with Inspire as we continue to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry.”
Guggenheim Securities, LLC is serving as financial advisor to Sonic and Shearman & Sterling LLP is serving as its legal counsel. White & Case LLP is serving as legal counsel to Inspire.
Dunkin' Ditches Donuts
Dunkin’ Donuts unveiled its new branding at its Global Franchisee Convention that officially recognizes its name as simply “Dunkin’.” The change will officially take place in January 2019 with the new branding appearing on packaging as well as the company's advertising, website and social channels.
The new branding conveys the company’s focus on serving great coffee fast, while embracing Dunkin’s heritage by retaining its familiar pink and orange colors and iconic font, introduced in 1973. Beginning the first of the year, the new branding will appear on packaging, as well as the company’s advertising, website and social channels. Going forward, the new “Dunkin’” logo will also be featured on exterior and interior signage on all new and remodeled stores in the U.S. and, eventually, internationally. The brand tested the new logo extensively, including on exterior signage at Dunkin’ locations featuring its next generation design concept over the past year.
According to Dunkin’ Brands’ CEO and Dunkin’ U.S. President David Hoffmann, “Our new branding is one of many things we are doing as part of our blueprint for growth to modernize the Dunkin’ experience for our customers. From our next generation restaurants, to our menu innovation, on-the-go ordering and value offerings, all delivered at the speed of Dunkin’, we are working to provide our guests with great beverages, delicious food and unparalleled convenience. We believe our efforts to transform Dunkin’, while still embracing our incredible heritage, will keep our brand relevant for generations to come.”
“By simplifying and modernizing our name, while still paying homage to our heritage, we have an opportunity to create an incredible new energy for Dunkin’, both in and outside our stores,” said Tony Weisman, Chief Marketing Officer, Dunkin’ U.S. “We are bringing the iconic name Dunkin’ to the forefront in a bold way that brings to life how we refill optimism with each cup and bring fun, joy and delight to our customers each and every day.”
The new branding was developed in partnership with new creative and branding agencies Jones Knowles Ritchie (JKR), BBDO New York and Arc Worldwide. Although the word “donuts” will no longer appear in the logo or branding, donuts will remain a significant focus for the brand. The #1 retailer of donuts in America sells more than 2.9 billion donuts and MUNCHKINS® donut hole treats annually worldwide.. Since 1950, the number of Dunkin’ restaurants has increased to more than 12,600 restaurants worldwide in 46 countries.
Grubhub to Acquire Tapingo
Grubhub will acquire campus food ordering platform Tapingo for approximately $150 million. Tapingo's U.S.- and Israel-based teams have built a technology platform custom designed for campus use, with direct integration into college meal plans and point-of-sale (POS) systems, ensuring seamless order-taking and accurate, up-to-the-minute transparency on wait times for diners. The Tapingo platformm which has more than 150 college partners, also streamlines operations and increases in-store efficiency for campus restaurant partners—including Taco Bell, Chipotle, Chick-fil-A, Panda Express and Jamba Juice—and powers partnerships with Aramark and Sodexo, the leading providers of food services and facilities management nationwide.
"We are excited to add Tapingo, a company that shares our vision of bringing greater convenience to diners and improving the restaurant ordering and pickup experience through technology," said Matt Maloney, Grubhub's founder and chief executive officer. "We value the college student population, many of whom we hope become life-long Grubhub diners with their first order. Tapingo makes students' lives easier, allows merchants to efficiently capitalize on online ordering, and enables colleges and universities to give students the technology they've come to expect."
"Joining Grubhub is an important step forward for Tapingo. Grubhub is the industry leader in food delivery, allowing us to provide even greater value to our campus partners and student diners with access to Grubhub's technology and delivery expertise," said Daniel Almog, Tapingo's co-founder and chief executive officer. "By joining forces with Grubhub's network of over 85,000 restaurant partners that offer online delivery and pickup, we'll continue to serve our loyal diners long after they graduate from college, which has always been our aspiration."
The transaction is expected to close in the fourth quarter of 2018. Kirkland & Ellis LLP and Fischer Behar Chen Well Orion & Co served as legal counsel to Grubhub in connection with the acquisition. Herzog, Fox & Neeman and Silicon Legal Strategy served as legal counsel and JMP Securities LLC served as a financial advisor to Tapingo.
Taco Bell Expands Cantina Concept
Two years since its grand opening on the Las Vegas Strip, Taco Bell's busiest location unveils their grand expansion. The brand, along with franchise partners Diversified Restaurant Group, will open a second Cantina location on historic Fremont Street in Downtown Las Vegas.
With an additional 1,200 square feet, the flagship's expansion adds a brand-new second floor private space with Las Vegas Strip views, serviced by a new second floor bar capable of hosting larger weddings and additional special events. On the first floor, guests will find a larger interior dining area, retail space, and an expanded kitchen and back of house area. The newly renovated flagship restaurant will also feature state-of-the-art self-order kiosks, designed to ensure a seamless and customized customer ordering experience, all at the touch of a button.
Since its opening in November of 2016, the flagship Cantina location has redefined the customer experience in the Quick Service Restaurant (QSR) space, including 24-hour service, DJ entertainment, VIP lounges, weddings, retail experience and a Freeze wall; all of which contributed to its success and desire to expand and meet increased consumer demands.
It's that consumer demand that leads to Taco Bell eyeing a second Cantina location in Las Vegas, this time on historic Fremont Street. Slated for a 2019 opening, the 6,000 square foot location would take over a portion of the former El Portal Theatre which closed in the late 1970's. The new Fremont Street restaurant will have an open-air design to it, similar to the flagship restaurant, perfect for guests who enjoy indoor-outdoor dining experiences. It also has a never-before-seen second floor entry, which guests will access via a lit-up escalator from the first-floor sidewalk. Upon entering, guests will be welcomed by the restaurant's open kitchen, a Cantina staple, which allows guests to see their customized menu items freshly prepared in-front of their eyes. Customers can then take their open-plated meals to any of the seats in the restaurant, either inside, or on the open-air patio. The restaurant follows the brand's goal to make sure each Cantina restaurant is designed in a unique way that represents the local community around it.
"We've seen what happens when Taco Bell Cantina meets Las Vegas, and we're excited to bring that experience to historic Fremont Street along with our fantastic franchise partners," said Amanda Clark, Head of North American Development. "Our continued growth in urban, high foot traffic destinations and downtowns are a big piece of the growth puzzle as we grow from 7,000 to 9,000 restaurants over the next four years."
Since launching the elevated urban experience in 2015, Taco Bell has opened nearly 30 restaurants in urban spaces, 17 Cantina and 13 Urban In-line restaurants, across the United States. The brand plans to continue their expansion into urban and downtown neighborhoods with the goal of opening nearly 50 more urban restaurants in 2019. These locations are part of the brand's plan to have 8,000 U.S. restaurants total by 2022, at least 300 of which will be urban concepts.
Chipotle Plans Ohio Expansion
Chipotle Mexican Grill plans to expand its operations in Franklin County, Ohio investing more than $5.5 million and creating more than 270 new jobs. Hiring for communications, development, finance, food safety, human resources, legal, marketing, facilities operations and technology positions is underway.
The company is restructuring its national corporate footprint and plans to consolidate some of its operations in New York and Colorado to one location in Franklin County, growing its presence in the Region. This strategy will enable the company to streamline operations and position itself for future growth.
“We are excited to grow our operations and strengthen our workforce in Central Ohio,” said Brian Niccol, CEO of Chipotle. “The Columbus Region offers us the right combination of a diverse talent pool and innovation to continue Chipotle’s national and global growth.”
“We and our partners at Columbus 2020 are excited Chipotle plans to bring significant operations and more than 270 new jobs to the Region,” said Joe Needham, director for food and agribusiness at JobsOhio. “Chipotle is one of the most recognized brands in the country and this expansion in Ohio will play a major role in its future growth.”
Gather Adds Bizly
Gather added Bizly to its booking network. The enterprise marketplace was designed to easy for employees to book events at leading hotels, restaurants, and other hospitality venues, and brings a rapidly growing set of Fortune 500 customers to the Gather Booking Network.
"Companies are looking for ways to drive visibility and ease around booking events," said Ron Shah, Founder and CEO at Bizly. "Our partnership with Gather will give our users access to thousands of additional venues and a streamlined booking process which delivers efficiency and savings."
The Gather Booking Network allows restaurants and venues to tap into a larger audience by providing more ways to promote their businesses in the top places where event planners go to find and book events. Venues are listed on partners’ sites and showcased in relevant search results to generate more leads. When planners find a venue and submit an event request, they’re seamlessly connected via Gather — resulting in a streamlined booking process and exceptional customer experience.
“The addition of Bizly to the Gather Booking Network will expose our customers to a whole new audience in the corporate events industry,” said Nick Miller, co-founder and CEO at Gather. “We’re excited to see the Booking Network growing and connecting even more planners and venues to create a truly seamless booking experience, a vision shared by the team at Bizly.”
Bizly joins existing Gather Booking Network partners that include Yelp, EVENTup, BizBash and Wedding Spot.
Nacho Daddy Goes Out of Market
Las Vegas-based restaurant group Nacho Daddy announced its first out-of-market expansion with the fourth official location being planted in Duluth’s historic Parsons Alley in suburban Atlanta, Georgia and is set to open in early December.
“It’s been a dream of ours to expand the Nacho Daddy brand since we first opened our doors in 2010,” said Paul Hymas, president and managing partner, Nacho Daddy. “This whole concept was started by four friends over our mutual love for the Rodney Dangerfield of food…nachos. It’s crazy to think we now get to continue our quest to get the nacho respect outside of Vegas and we’re happy Georgia is the next stop on our mission establish nachos as their own food group.”
Like the three Las Vegas locations, the new Duluth restaurant will serve traditional Mexican-American cuisine including a variety of creative nachos and specialty cocktails made famous in Sin City and featured on The Food Network, “Food Paradise” on Travel Channel and Animal Planet’s “Tanked.” The 3,942 square-foot restaurant will feature indoor and outdoor seating, rooftop patio overlooking the outdoor amphitheater, 15 high-def televisions for optimal sports viewing and an open floor plan and kitchen where guests will be able to watch the chefs prepare menu favorites. Like the other locations, Nacho Daddy will feature the restaurant’s signature items including Filet Mignon Nachos with house-made corn chips topped with a cheese blend, refried beans, filet mignon, sour cream, pico de gallo, guacamole, cilantro and house-made ranchero sauce; Flaming Fajitas with choice of chicken, filet mignon or shrimp, served on tableside with all of the fajita fixings; Mexi-Cobb Salad with romaine hearts tossed in onion-thyme vinaigrette, topped with chicken strips, pico de gallo, cheese blend, corn, cucumbers, avocado and tortilla strips; Combination Plates with choice of enchiladas and tacos; and the Nacho Daddy Triple Dip featuring warm tortilla chips with spicy salsa, signature skillet queso dip and fresh guacamole. Nacho Daddy also serves its traditional Daddy’s Margarita and the world-famous Scorpion Shot. The expansive menu delights a variety of diners including vegetarian and vegan guests with meatless and dairy-free twists on popular items.
Nacho Daddy is also looking at further expansion opportunities outside of its home base of Las Vegas including additional locations in the Southeast and in the Western United States. The popular restaurant also created their own Nacho Daddy Patron tequila, four varieties of Nacho Daddy craft beer and coffee to serve at local restaurants, and will launch its own line of hot sauces nationally in early 2019. Nacho Daddy is also in early discussions for a cookbook featuring their crave-worthy nacho recipes.
MRM's Executive Editor Barbara Castiglia guested on MarketScale’s Hospitality Podcast talking about the impact of technology in hospitality, what MRM does and why we do it.
Click here to listen.