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High Bluff Capital Partners, the parent company of Quiznos, Taco Del Mar, and Church’s Texas Chicken has agreed to buy 81 Hardee’s locations following a court-approved auction of assets of Summit Restaurant Holdings, which filed for Chapter 11 bankruptcy protection in May.

The sale hearing for the restaurants is set for July 18 and the sale itself is expected to close in August, according to a release from High Bluff. Terms of the deal were not disclosed.

The Hardee’s restaurants are located in Alabama, Florida, Georgia, Kansas, Missouri, Montana, South Carolina, and Wyoming.

High Bluff said the purchase was in line with its strategy of “investing in iconic consumer-facing brands, with a strong presence in historically underserved markets, that have the opportunity for significant growth and value creation.”

High Bluff founder Anand Gowda said Hardee’s, a quick-service chain franchised by CKE Restaurant Holdings, which also franchises quick-service Carl’s Jr., fits into that mold.

Hardee’s operates mostly in the Midwest and South, and Carl’s Jr. is mostly in the West, with overseas locations as well.

“Hardee’s is a regionally strong brand, known for its quality, hand-crafted menu,” Gowda said in the release. “These restaurants in many cases have served as central neighborhood hubs, where people and families come to gather and connect. It’s in areas like these where we see the greatest opportunity to create value by truly having a positive impact on local communities and the people who call them home. Guests aren’t just craving delicious food, they’re craving togetherness and we are thrilled to partner with the Hardee’s team to deliver that.”

At the time of Summit’s bankruptcy, it and its subsidiaries continued to operate 108 restaurants after having closed 39 in previous weeks.

CKE had said at the time that it was looking to sell the restaurants to “a qualified and well-capitalized buyer with a record of success across the restaurant, entertainment, food, beverage and retail markets.”

On Monday CKE CEO Max Wetzel said High Bluff was just such a company.

“With an impressive track record of growing numerous consumer brands, High Bluff is the ideal partner to support our efforts to deliver outstanding service and the foods our core customers crave, while making critical investments in restaurant remodels and other initiatives designed to boost traffic and sales,” he said in the release.

Dave Dixon will be overseeing the operations of the 81 Hardee’s restaurants, according to High Bluff. He previously operated 116 Hardee’s locations from 2000 to 2003 and increased their sales by 35% according to High Bluff, which said he also had experience with quick-service brands KFC, Burger King, Culver’s, Popeyes, and Church’s.

Coady Smith, a principal at High Bluff, said the firm would continue to seek more restaurants to buy.

“We are excited about the additional scale and diversity the Hardee’s opportunity brings to our platform,” Smith said. “Over the next few years, we plan to continue to aggressively pursue new acquisitions, with a goal of growing our platform to six to ten restaurant concepts with $75 to $100 million of EBITDA.”

High Bluff Capital Partners is based in San Diego, Calif.

There are more than 2,100 Hardee’s locations nationwide.

Read full release here: https://www.nrn.com/quick-service/high-bluff-capital-partners-which-owns-quiznos-taco-del-mar-and-church-s-texas-chicken

ATLANTA–(BUSINESS WIRE)–Church’s Chicken® (“Church’s” or the “Company”), one of the world’s largest quick service chicken restaurant chains, announced it has closed an offering by certain of its subsidiaries for $225,000,000 Series 2021-1 Fixed Rate Senior Secured Notes, Class A-2 (the “Offered Notes”). This transaction was structured as a whole business securitization through five special purpose subsidiaries (the “Co-Issuers”) and represents Church’s third whole business securitization issuance. The Offered Notes were priced at a coupon of 3.931% and have an expected term of five years.

Proceeds from the issuance will be used to repay a bridge facility that High Bluff Capital Partners, supported by various alternative investment funds managed by FS Investments, used to acquire Church’s in September 2021. The Offered Notes received a rating of BBB from Kroll Bond Rating Agency, consistent with the rating for Church’s previous whole business securitization issuance (which closed in 2017 and was refinanced concurrently with the acquisition of Church’s). The Co-Issuers also issued $25,000,000 Series 2021-1 Variable Funding Senior Secured Notes, Class A-1, which will allow the Co-Issuers to borrow amounts from time to time on a revolving basis (“VFN Notes”).

“Having shown remarkable resiliency over the course of the pandemic through the outstanding efforts of our team members and franchisees, Church’s Chicken is moving forward with tremendous momentum,” said Joe Christina, CEO of Church’s Chicken. “This financing underscores the strength of the Church’s brand and demonstrates considerable confidence in our ability to execute our ambitious growth agenda and continue to build this great brand.”

“We’re very pleased with this transaction, with its 3.931% coupon marking a meaningful improvement versus the 6.500% coupon of Church’s 2017 offering,” said Coady Smith from High Bluff Capital Partners. “This is a clear indication from the market that Church’s is a significantly different company today than it was in 2017. We look forward to supporting the leadership team to continue on this positive trajectory through additional innovation and investment, and delivering best-in-class opportunities to franchisees.”

The Offered Notes were sold to qualified institutional buyers in the United States in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in accordance with Regulation S under the Securities Act. The Class A-2 Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable securities laws of any state or other jurisdiction. The Class A-2 Notes, together with the VFN and LR Notes, herein referred to as the “New Notes”. This press release does not constitute an offer to sell or the solicitation of an offer to buy the New Notes or any other security, nor shall there be any offer, solicitation or sale of the New Notes or any other security in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.

About Church’s Chicken®

Founded in San Antonio, Texas, in 1952 by George W. Church, Church’s Chicken® is one of the largest quick-service restaurant chicken chains in the world. Church’s® specializes in Original and Spicy Chicken freshly prepared throughout the day in small batches that are hand-battered and double-breaded, Chicken Sandwich, Texas Tenders™, Honey-Butter Biscuits™ made from scratch and freshly baked, and classic, home-style sides all for a great value. Church’s® (along with its sister brand Church’s Texas Chicken® inside the Americas and Texas Chicken® outside the Americas) has more than 1,500 locations in 26 countries and international territories. For more information, visit www.churchs.com. Follow Church’s® on Facebook at www.facebook.com/churchschicken and Twitter at www.twitter.com/churchschicken.

About High Bluff Capital Partners

Based in San Diego, California, High Bluff Capital Partners is a private investment firm that specializes in making control-oriented equity investments in iconic consumer-facing companies. The firm’s team has more than 30 years of experience managing, investing, leading and transforming consumer businesses across the restaurant, entertainment, food, beverage and retail markets. More information can be found at www.highbluffcap.com.

About FS Investments

FS Investments is a leading asset manager dedicated to helping individuals, financial professionals and institutions design better portfolios. The firm provides access to alternative sources of income and growth, and focuses on setting industry standards for investor protection, education and transparency. FS Investments is headquartered in Philadelphia, PA with offices in New York, NY, Orlando, FL and Leawood, KS. Visit www.fsinvestments.com to learn more.

Deal Advisors

Barclays acted as sole structuring advisor and sole bookrunner in connection with the whole business securitization and also provided the acquisition bridge facility. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisors to Church’s, High Bluff Capital Partners, and FS Investments.

Forward-Looking Statements

Statements contained in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “goal” and other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. These factors include, but are not limited to: disruptions caused by the COVID-19 pandemic and measures to reduce its spread and their impact on the business, operations and liquidity of Church’s; instability, disruption or destruction caused by civil insurrection or social unrest; Church’s ability to compete with other restaurants, grocery stores, food delivery services and convenience stores for customers, employees, restaurant locations and franchisees; shortages in the supply of chicken and other ingredients and supplies; risks associated with the ownership and operation of the Company Restaurants and the ownership of the real estate assets; risks associated with the franchise model; changes in consumer spending caused by changes in economic, market and other conditions, the availability of discretionary income and changes in consumer preferences and perceptions; the ability of Church’s distributors and suppliers to continue to deliver quality products to at moderate prices; changes in operating costs, as well as interest rates; increases to the cost of food, especially for chicken; food safety, food-borne illness, activities of activist groups and other concerns; the willingness of Church’s suppliers, distributors and service providers to supply it with goods and services pursuant to customary credit arrangements; risks associated with additional permitted leverage, including in connection with acquisitions; the effectiveness of Church’s marketing and advertising programs; Church’s ability to retain its current management and other key employees; Church’s ability to open new restaurants in existing and new markets and expand its franchise system; Church’s and its franchisees’ ability to comply with existing and future health, safety, employment, environmental and other government regulations; risks associated with any material failure, interruption or security breach of Church’s computer systems or technology; the occurrence of cyber incidents or risks associated with a deficiency in cybersecurity; product liability exposure; the geographic concentration of Church’s restaurants in the Southern United States; the operational and financial success of Church’s franchisees; risks associated with implementing Church’s business strategy; Church’s ability to adequately protect or establish rights in its intellectual property; reputational damage if franchisees and other licensees do not observe the required quality and trademark usage standards and other standards set forth in their franchise agreements and license agreements. The forward-looking statements contained in this release are made as of the date hereof and Church’s does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances.

Contacts
Media inquiries
Kim Miller atkimmiller@inklinkmarketing.com

Analyst/Investor inquiries
Dusty Profumo at dprofumo@churchs.com

Read full release here: https://www.businesswire.com/news/home/20211105005678/en/Church%E2%80%99s-Chicken-Completes-250-Million-Securitization-Issuance

SAN DIEGO–(BUSINESS WIRE)–High Bluff Capital Partners (“High Bluff”), supported by various alternative investment funds managed by FS Investments, announced it has entered into a definitive agreement to acquire Church’s Chicken®, one of the world’s largest quick service chicken restaurant chains, from FFL Partners. Subject to customary closing conditions, the transaction is expected to be completed during Q3 of 2021.

Based in Atlanta and founded in 1952, Church’s® has more than 1,500 locations in 26 countries and international territories. Demonstrating considerable resiliency in the face of a devastating global pandemic, the brand in 2020 leveraged its strengths in family meals, digital offerings, delivery and to-go orders to post a strong year of performance, generating system-wide sales of nearly $1.2 billion. Over the next year, the brand expects to expand its already sizable domestic and international presence with the opening of more than 100 new locations, including the roll-out of its highly successful Blaze Image restaurant concept.

Specializing in equity investments in restaurants and iconic consumer-facing brands, High Bluff established its restaurant platform, REGO Restaurant Group, in 2018 with the acquisitions of toasted sub pioneer Quiznos and Taco Del Mar, a fast-casual restaurant chain offering coastal Mexican cuisine. Since then, the firm has had a transformative impact on both brands – driving significant menu innovation, modernizing marketing and branding, enhancing the guest experience, and delivering best-in-class opportunities to franchisees.

“At a time when the entire restaurant industry has faced unprecedented challenges, Church’s has stood out as a notable bright spot, having emerged from the pandemic with considerable tailwinds that strongly position the brand for tremendous growth geographically as well as in the overall chicken category,” said Anand Gowda, who, prior to founding High Bluff Capital Partners served as President and Managing Partner of Metropoulos & Co.

“Our investment strategy continues to center on identifying brands with long-term connections with consumers that can be energized and propelled to greater success through targeted industry expertise, operational efficiencies, innovation and creative brand management,” Gowda added. “Church’s fits squarely within this wheelhouse. We look forward to leveraging our robust platform and working closely with the management team and franchisees to accelerate Church’s positive trajectory.”

“In addition to becoming a premier global franchisor, Church’s has long dominated the value-oriented market in the chicken category, with a highly recognizable brand, consistent quality and delicious offerings,” said Rushabh Vora, Managing Director at FS Investments, which led a structured capital investment in support of the acquisition out of its FS Tactical Opportunities Fund along with other affiliated investment funds. “With the global chicken QSR market forecasted to grow meaningfully over the next few years, and major geographies such as China and Australia still yet to be tapped by Church’s, we see exciting growth potential for this beloved brand.”

“The past few years have been all about growth for the brand and its franchisees,” shared Joe Christina, Chief Executive Officer for Church’s. “Our focus will be to deliver against our strategic plan with new locations in the U.S. and internationally and continued profitable sales growth.”

“I am proud to continue leading the brand with High Bluff and the solid backing of FS Investments, which will give us the added momentum to truly realize our Vision to be the Global Franchisor of Choice,” Christina said. “I thank our teams and franchisees around the world for their ability to deliver and establish a framework to expand what we’re capable of accomplishing as a team.”

About Church’s Chicken®

Founded in San Antonio, Texas, in 1952 by George W. Church, Church’s Chicken® is one of the world’s largest quick-service restaurant chicken chains. Church’s® specializes in Original and Spicy Chicken freshly prepared throughout the day in small batches that are hand-battered and double-breaded, Tender Strips®, Honey-Butter Biscuits™ made from scratch and freshly baked, and classic, homestyle sides all for a great value. Church’s® (along with its sister brand Texas Chicken® outside the Americas) has more than 1,500 locations in 26 countries and international territories, and experienced system-wide sales of nearly $1.2 billion in 2020. During two national media windows, the brand drove sales performance that outpaced the broader QSR category. Church’s international presence also continues to impress as it achieved record-breaking growth for the second consecutive year in 2020 – despite a global pandemic. For more information, visit www.churchs.com. Follow Church’s® on Facebook at www.facebook.com/churchschicken and Twitter at www.twitter.com/churchschicken.

About High Bluff Capital Partners

Based in San Diego, California, High Bluff Capital Partners is a private investment firm that specializes in making control-oriented equity investments in iconic consumer-facing companies. The firm’s team has more than 30 years of experience managing, investing, leading and transforming consumer businesses across the restaurant, entertainment, food, beverage and retail markets.

More information can be found at www.highbluffcap.com.

About FS Investments

FS Investments is a leading asset manager dedicated to helping individuals, financial professionals and institutions design better portfolios. The firm provides access to alternative sources of income and growth, and focuses on setting industry standards for investor protection, education and transparency. FS Investments is headquartered in Philadelphia, PA with offices in New York, NY, Orlando, FL and Leawood, KS. Visit www.fsinvestments.com to learn more.

Deal Advisors

Moelis & Company LLC served as the M&A advisor to High Bluff and FS Investments, and exclusive placement agent to High Bluff; Paul, Weiss, Rifkind, Wharton & Garrison LLP and Dentons US LLP served as legal advisors to High Bluff and REGO Restaurant Group; Orrick, Herrington & Sutcliffe LLP served as legal advisor to FS Investments.

Contacts
Marie Espinel or Hannah Arnold
The LAKPR Group
mespinel@lakpr.com or harnold@lakpr.com

Read full release here: https://www.businesswire.com/news/home/20210802005473/en/Church%E2%80%99s-Chicken%C2%AE-To-Be-Acquired-by-High-Bluff-Capital-Partners-and-Investment-Funds-Managed-by-FS-Investments

High Bluff Capital Partners is adding Church’s Chicken to its growing roster of restaurant brands under its REGO Restaurant Group platform, established in 2018.

The company has entered into a definitive agreement to acquire Church’s from FFL partners for an undisclosed amount. FS Investments led a structured capital investment in support of the acquisition out of its FS Tactical Opportunities Fund along with other affiliated investment funds. The transaction is expected to be completed in Q3.

Atlanta-based Church’s Chicken has more than 1,500 locations in 25 countries and territories. The nearly 70-year-old brand generated systemwide sales of about $1.2 billion in 2020, including its most profitable performance in “many years,” by leveraging a strong demand for chicken and bundled meals, as well as drive-thru and off-premise channels.

This momentum is what attracted High Bluff founder Anand Gowda to the brand.

“At a time when the entire restaurant industry has faced unprecedented challenges, Church’s has stood out as a notable bright spot, having emerged from the pandemic with considerable tailwinds that strongly position the brand for tremendous growth geographically as well as in the overall chicken category,” he said.

Despite those tailwinds, however, Gowda acknowledges that Church’s needs a bit more agility to better compete in an intensifying space.

“My perspective is that situations that appear to be challenged on the outside–like having a dated brand–have tremendous loyalty from the customer base and if you can invest some capital in the physical assets and technology, that’s interesting,” he said. “Church’s has performed very well through Covid, but there is still so much untapped value here. It’ll take some simple blocking and tackling to energize the customer base and that’s what we intend to do.”

Those blocking and tackling efforts include bringing innovative menu offerings to market more quickly, elevating the tech platform, improving the point-of-sale system and getting a loyalty program in place as soon as possible.

Essentially, Gowda wants to bring a faster mindset to the system, which has been under the same ownership since 2009.

“They took a long time to make decisions like implementing price changes. They were late to the chicken sandwich wars. It shouldn’t take two years to develop a loyalty program,” he said. “You have to be quick in this industry–especially now. We have a small group of owners and that gives us the ability to make decisions quickly. Our ownership is narrow and I think that will be a strategic advantage with the brand.”

Taking over a legacy brand at a sprint’s pace has its risks, however. Namely, it could turn off loyal franchisees who have been with the system for a long time. Gowda isn’t worried about this so much, however.

“We all have the same goals. If we’re not working to increase their margin, we shouldn’t be in the market. Our objective is to bring more sales to franchisees in a more agile way and give them more opportunities at growth and more flexibility with technology. They’re in acute alignment with that objective,” he said.

If that alignment is sustained, Gowda expects big things for the Church’s brand. He wants to grow its footprint, including in nontraditional ways such as ghost kitchens–a plan he’s deploying with REGO’s other brands.

Further, consumers have proven their appetite for chicken is boundless and he believes there is plenty of room for Church’s Texas-style chicken alongside the Kentucky-style chicken of KFC and the Louisiana-style chicken of Popeyes (both of which are on a significant upswing, by the way). He also likes the momentum Church’s has with its international business, its strongest driver of growth throughout the past two years.

“We have this wonderful international business and we can take all the flavors that we put into those businesses and import them here that are in high demand. International is one of our strongest assets and it will help us bring forward great products that will generate great sales. Our operators are thirsty for this type of innovation,” Gowda said. “We recognize we’ll fail sometimes but we’ll win big sometimes. In two or three years, we’ll be leading this category versus following in this category.”

With the acquisition of the chicken chain, REGO Restaurant Group diversifies its portfolio that already includes sub chain Quiznos and Mexican concept Taco Del Mar. Gowda would like to get to at least 10 brands and double its EBITDA (earnings before interest, taxes, depreciation and amortization) to north of $100 million in the next few years. REGO plans to continue taking advantage of the mergers & acquisitions market while it remains hot.

“It took us a little while to get the snowball going, but now we have a scalable platform with Church’s. That was our goal–scale to get to scale. Now we focus on buying bigger assets, financing them in a cost efficient way and accelerate opportunities that are either undermanaged, poorly capitalized or growing well but in the mid-to-early stages of growth that we can accelerate,” Gowda said. “We’re just getting started.”

Read full release here: https://www.forbes.com/sites/aliciakelso/2021/08/02/churchs-chicken-acquired-by-investment-firm-high-bluff-capital-partners/?sh=7ec61f504439 

High Bluff Capital’s June acquisition of Quiznos wasn’t simply another blip on the frenzied M&A radar. It was, in earnest, the introductory move from Rego Restaurant Group, a new platform that wants to make a habit of resurrecting once-mighty brands.

Read full article here: https://www.qsrmagazine.com/finance/new-quiznos-owner-wants-buy-6-10-chains