Dive Brief:

• Focus Brands, the parent company of  Auntie Anne’s, Carvel Ice Cream, Cinnabon and Moe’s Southwest Grill, could seek an IPO early next year, reported Bloomberg. Atlanta-based private equity firm Roark Capital formed Focus in 2001 when it bought Carvel for about $30 million, and its brands now boast more than 6,000 stores in more than 50 countries. Roark hopes for a $1 billion valuation, according to Bloomberg’s sources.

• Three years after acquiring Carvel, Focus added Cinnabon and Seattle’s Best Coffee, followed quickly by Schlotzsky’s sandwich shop in 2006 and Moe’s in 2007. Together, the group creates $100 million in annual EBITDA revenue, but that number will likely grow as Focus finalizes its $200 million takeover of Jamba Juice, announced in August.

• In the past two decades, Roark has amassed a formidable restaurant portfolio that includes stakes in fast-growing Mediterranean chain Naf Naf Grill, Culver’s and Jimmy John’s. It also controls Inspire Brands, parent company to Arby’s, Buffalo Wild Wings and most recently Sonic.

Dive Insight:

Roark’s potential IPO bid for Focus Brands is “a long time coming,” according to Bloomberg. Jamba Juice will bring Focus’ total global units to nearly 6,000 and could be the icing on what was already a booming and well-rounded multi-franchise group.

When the group bought Cinnabon and Seattle’s Best in 2004 for $21 million, Carvel had, in three years, entered 17 new states and added 2,600 outlets for its CPG line. By 2006 Focus had scooped up McAlister’s Deli, now at 400-some units; Moe’s Southwest Grill, now at 700 units; and Schlotzsky’s, a kitschy sandwich shop from Austin with more than 350 locations. Overall, 2016 was a big year for Focus Brands, and though Roark would not comment directly on the IPO’s probability, it seems their investors see even more growth on the horizon.

Focus has a pretty solid track record for expansion and sales growth after acquiring these brands. In 2016 Focus nearly doubled Carvel's footprint — and introduced it to markets outside the East Coast — by co-branding with Auntie Anne’s and Cinnabon. The group seems to heavily promote the opportunity to team up with complementary brands to new and existing franchise owners.

Jamba Juice and its 800 locations could perhaps provide other collaboration innovations. Denmark-based Joe & the Juice, another global chain toying with going public, serves sandwiches, coffee and fresh-pressed juices. Who’s to say Jamba Juice couldn’t serve its power-boosted smoothies alongside Schlotzsky’s or McAlister’s sandwiches? In announcing Focus’ latest acquisition in August, CEO Steve DeSutter emphasized Jamba’s loyal customer base and the growing juice and smoothie market as bright spots for the company. 

Inspire Brands, the parent company to Arby’s, Buffalo Wild Wings and now Sonic could also be poised for growth and maybe an IPO down the line if sales trend upward. Wendy’s sold its 12% stake, worth $450 million, back to Inspire in August. That cash likely helped Roark buy Sonic in September, and could lead to expansion, menu innovation and perhaps new delivery opportunities (Focus partnered with Postmates in 2015).

Whether Focus ultimately decides to go through with an estimated $1 billion IPO in the first half of 2019, the group now operates one of the ten largest quick-service groups in the U.S. Meanwhile, Roark just announced $6.5 billion in new funding, which could prove lucrative for its restaurant holdings. Since 2011, the firm has invested in Corner Bakery, CKE Restaurants (Carl’s Jr. and Hardee’s), Naf Naf, Jimmy John’s and Culver’s.