BBQ Holdings lands 1st acquisition with Granite City Food

Dive Brief:

BBQ Holdings, parent company of Famous Dave's, Clark Crew BBQ and Real Famous BBQ, entered into an asset purchase agreement to acquire the casual dining chain Granite City Food and Brewery, according to a press release. Terms of the deal were not disclosed.
"This meaningfully accretive acquisition of Granite City Food and Brewery aligns with our strategy to accelerate growth and expansion as a multi-brand restaurant company," Jeff Crivello, CEO of BBQ Holdings, said in the press release.
This news follows the company’s opening of new restaurant concepts, including Clark Crew BBQ in Oklahoma City, Real Famous BBQ in Utah and several smaller-footprint concepts in Minneapolis.

Dive Insight:

Alongside Inspire Brands, FAT Brands and Cracker Barrel, BBQ Holdings joins a growing list of restaurant companies shifting to large multi-branded concepts. This strategy allows companies to ease their reliance on one brand's performance and provides a quick top-line growth driver amid growing pressures from declining traffic and rising labor costs.

In September, Famous Dave's became BBQ Holdings with the goal of buying and running restaurants beyond Famous Dave’s and obtained financing in order to do so. The first of these is Granite City, which likely won’t be the last. The company said during a September investor presentation that it would consider solid brands that are immediately accretive, have attractive EBITDA, healthy same-store sales trends, the opportunity to franchise and a three to four year payback.

Granite City, which operates 25 units, originally filed for Chapter 11 bankruptcy in December in order to reorganize the business and secured $5 million in a loan to remain in operation and set up a stalking horse bid of $7.5 million at the time. Given it is primarily located in the Midwest and its headquarters is in Minneapolis, the timing of its sale likely fits with BBQ Holdings' acquisition appetite. The casual restaurant serves local and regional craft beers, which aligns well with the company’s primarily BBQ-oriented concepts.

With BBQ Holdings emphasizing off-premise at Famous Dave's, it could help build a better off-premise path for Granite City, which blamed its bankruptcy on the rise in takeout and delivery alongside a decline in foot traffic in shopping malls and retailers where many of its restaurants are located. Famous Dave's has been exploring smaller concepts as well and virtual kitchens as part of its diversification push, and these strategies could help get Granite City away from the mall setting.