Applebee’s and IHOP parent Dine Brands has agreed to acquire fast casual Fuzzy’s Taco Shop for $80 million.
The restaurant includes 138 restaurants in 18 states—roughly 98 percent of which is franchised—and has as a development pipeline with more than 125 contracted obligations. The chain is currently earning $1.6 million in AUV, and same-store sales are growing 3 percent. Systemwide sales are expected to reach $230 million in 2022. Of Fuzzy’s three dayparts, dinner mixes 52 percent, followed by lunch (42 percent), and breakfast (6 percent). Off-premises accounts for 40 percent of sales.
“I’m incredibly proud of the work the Fuzzy’s team and franchisees have accomplished over the past few years, which has enabled us to enter this new chapter of growth together with Dine Brands,” Paul Damico, CEO of Fuzzy’s, said in a statement. “With Dine Brands’ substantial industry resources, we will be well positioned to build upon our proven successes and accelerate our growth.”
Fuzzy’s was founded in 2003 near TCU University. The brand is recognized for its baja-style tacos, burritos, quesadillas, and other Mexican favorites.
Dine Brands is purchasing Fuzzy’s from NRD Capital, which has held a majority stake since 2016. Previously, the taco shop showed interest in forming its own restaurant platform. Last year, Fuzzy’s and NRD announced the formation of Experiential Brands, a group seeking similar-minded concepts with an identity that went beyond just food. At the time, Damico said Fuzzy’s goal was to double in size to more than 300 locations in the next five years, in addition to M&A activity. Texas, Oklahoma, Colorado, the Carolinas, Georgia, Florida, Alabama, and Tennessee were listed as growth markets. However, in the year since Experiential Brands was announced, the platform didn’t make any acquisitions.
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