Dive Brief:
- Private equity firm NRD Capital, which invests in small-to-mid-sized brands, has announced the formation of a new restaurant platform called Experiential Brands that plans to acquire food and beverage brands to add to its existing Fuzzy’s Taco Shop concept.
- Paul Damico, CEO of Fuzzy's Taco Shop, has been appointed as Experiential Brands' chief executive. He previously served as CEO of Global Franchise Group, parent company of concepts like Marble Slab Creamery, Great American Cookies and Hot Dog on a Stick, and president of Focus Brands, parent company of brands like Auntie Anne's, Cinnabon and McAlister's Deli.
- The company plans to double Fuzzy’s current footprint, which is about 150 units, within five years. In a press release emailed to Restaurant Dive, NRD Capital said its acquisition targets will be franchised brands in the food and beverage space that are "truly experiential" and growth-oriented.
Dive Insight:
Fuzzy's history of growth and its agility during the pandemic make it a natural anchor for Experiential Brands to leverage. Fuzzy’s was named one of Nation's Restaurant News' Fastest Growing Chains in 2018. Fuzzy's has balanced its on-premise experiences with a growing off-premise business since the start of the pandemic. The chain is testing an exclusive rewards club for "top tier" loyalty customers, as well as smaller-footprint called Fuzzy's Taco Shop Taqueria.
Earlier this year, the company earned Franchise Business Review awards best franchise culture and top food awards, two attributes which may appeal to new franchisees as it looks to expand.
In a statement, Damico said Fuzzy's is the optimal anchor for the fledgling company because of its unique offerings, which include a laid-back atmosphere, patios, Baja-style tacos, signature chips and queso, and a full bar.
"While the industry has seen an increase in online ordering and delivery, we believe there is still a place in the market for guests who are searching for a 'dining experience.' Fuzzy's Taco Shop is a prime example of why we believe this model to be successful," he said.
NRD Capital's founder and managing partner, Aziz Hashim touted Damico's track record, noting his role in growing Moe's Southwest Grill from 200 to 700 units during his time with Focus Brands.
NRD raised nearly $48 million in December 2020 with eye toward making deals coming out of the pandemic, according to Restaurant Business. Experiential Brands may be a product of that investment.
With this announcement, Experiential Brands joins a growing list of multi-brand restaurant platforms that have formed in recent years. In 2020 Chopt Creative Salad bought Dos Toros Taqueria to form Founders Table Restaurant Group, while Saladworks' parent created WOWorks following its acquisition of Garbanzo Mediterranean Fresh and Frutta Bowls.
In July, Fat Brands acquired Global Franchise Group. In August, Panera, Caribou, Einstein Bros. Bagels combined to form Panera Brands, while Tocaya Modern Mexican and Tender Greens merged to create One Table Restaurant Brands.
Though this type of activity is nothing new — Modern Restaurant Concepts was formed in 2019, for example, and Inspire Brands in 2018 — M&A activity has been picking up in the past year and a half as companies take advantage of cost, technology and other efficiencies created by scale.
