MTY Food Group buys Wetzel’s Pretzels for $207M

Dive Brief:

MTY Franchising USA, a wholly owned subsidiary of MTY Food Group, has agreed to buy Wetzel’s Pretzels from CenterOak Partners for $207 million, according to a press release.
Wetzel’s has over 350 locations across 25 states and locations in Canada and Panama. Ninety percent of its system is franchised.
CenterOak Partners originally bought Wetzel’s in 2016 from Levine Leicthman Capiatl Partners.

Dive Insight:

MTY Food Group, which closed its acquisition of BBQ Holdings in September, is buying Wetzel’s after a strong year for the pretzel chain. Wetzel’s reported a record-setting 2021, with systemwide sales surging and same-store sales up 24% compared to 2019. In the last 12 months, Wetzel’s total sales reached almost $245 million in the last 12 months, according to the press release. Before 2022, MTY Group’s last purchase of a U.S.-based chain was its $190 million purchase of Papa Murphy’s in 2019. MTY Group, which has bought over 50 brands since 1999, specializes in buying mature restaurant brands, according to Seeking Alpha.

Wetzel’s is currently growing and plans to open its 400th location in 2023. The brand also reports record franchisee interest, according to a press release. As of March, it planned to open 40 stores this year, and opened its first store within Macy’s in February. Last year, the company partnered with Phillips 66 to add its pretzel to convenience stores. The company is also expanding via food trucks. Earlier this year, it opened locations inside two Walmart stores.

When CenterOak Partners bought the chain in 2016, Wetzel’s operated solely in shopping malls, outlet centers, theme parks, select discount retail stores, train stations and airports. With mall traffic on the decline for years before the COVID-19 pandemic, brands like Auntie Anne’s and Wetzel’s began expanding to new location types. Auntie Anne’s has been opening co-branded drive-thrus with Jamba, while Wetzel’s opened a co-branded drive-thru with Thirst this year.

The addition of Wetzel’s to MTY Group could lead to more co-branded opportunities, since the group owns several snack food brands, including Cold Stone Creamery, Pinkberry and Planet Smoothie.