Monday, February 27, 2017
Tuesday, February 21, 2017
Popeyes to Be Bought by Owners of Burger King and Tim Hortons
Brazilian private-equity firm 3G Capital Partners LP sealed a deal in the restaurant business, just days after its plans to create a global packaged goods juggernaut fell apart.
Restaurant Brands International Inc., which was created in 2014 when 3G-owned Burger King bought Canadian doughnut chain Tim Hortons, said Tuesday it will buy chicken chain Popeyes Louisiana Kitchen Inc. for about $1.64 billion. 3G Capital-backed Kraft Heinz Co. last week made a $143 billion offer for consumer products giant Unilever PLC but dropped its bid over the weekend after Unilever said it wasn’t interested in a tie-up.
Restaurant Brands, which expanded its Burger King and Tim Hortons brands into new international markets, is planning to follow the same playbook with Popeyes. The move, though small relative to what 3G had attempted on the packaged food side, will help the private-equity firm extend its global reach.
“There’s no reason this brand shouldn’t be multiple times its size,” Restaurant Brands Chief Executive Daniel Schwartz said in an interview. “We see no reason we can’t plug this into our global network and accelerate the pace of growth.”
The strategy of buying a restaurant chain heavily concentrated in one market and expanding it into new ones fits the broader 3G playbook.
The private-equity firm bought ketchup giant H.J. Heinz Co. in 2013 because it liked the company’s strong global presence. It then bought Kraft Foods Group Inc. because that company’s business, which was concentrated in the U.S., complemented Heinz’s stronger global reach allowing it to introduce Kraft brands to other parts of the world. Merging Kraft Heinz with Unilever would have opened up additional markets for the company and diversified its portfolio by getting into nonfood packaged goods, such as soap and laundry detergent.
The Popeyes deal, expected to close in April, would diversify Restaurant Brands’s portfolio by adding chicken to its existing pair of a burger and coffee-and-doughnut chain. Restaurant Brands said it would pay $79 a share, a 19% premium to the company’s $66.12 closing price Friday.
Popeyes shares recently traded up 19% to $78.80.
Restaurant Brands said Popeyes is where Burger King was, in terms of growth, when 3G bought the latter in 2010. That year, Burger King opened 173 net new restaurants. The new owners accelerated the pace of growth, pushing Burger King into Latin America, Europe and the Middle East. The growth was fueled by a push to put more restaurants into the hands of franchisees. Last year, Burger King opened 735 net new restaurants for a total of more than 15,700 world-wide.
Restaurant Brands, meanwhile, brought more Tim Hortons to the U.S. and to new overseas markets such as the Philippines.
Like Burger King and Tim Hortons, Popeyes is also nearly 100% franchise-owned. Popeyes, founded in New Orleans, Louisiana, in 1972, is among the best-performing fast food chains. Last year, it opened 159 net new restaurants and now has more than 2,600 restaurants, mostly in the U.S.
Restaurant Brands operates under 3G’s bare-bones approach to running a company, using “zero-based” budgeting each year and cutting out what it sees as frivolous costs, including color copies. When 3G buys a company, its first approach normally involves identifying any excess costs and cutting them.
After 3G bought Burger King, it quickly laid off corporate employees and began selling more restaurants to franchisees. Popeyes is already pretty lean.
Chief Executive Cheryl Bachelder helped franchisees cut costs when she took over what was a struggling chain in 2007. She has used technology to better manage inventory and schedule labor and has turned to food prepared off site to cut down on time spent cooking. She helped the company save $40 million in supply chain costs in a period of three years by finding new manufacturing, shipping and packaging processes. She also has said that automation is an answer to higher labor costs.
Mr. Schwartz on Tuesday acknowledged that there may not be as much opportunity for cost-cutting at Popeyes as there was at Burger King.
“This one is all about growth,” he said.
The average Popeyes rings up about $1.4 million in average annual sales, and the company last year set a goal of boosting that to $2 million in the next seven to 10 years. The chain also set a goal of boosting franchisee profitability to $500,000 per restaurant during that time frame, up from $333,000.
Restaurant Brands was advised by Paul, Weiss, Rifkind, Wharton and Garrison LLP. Popeyes was advised by UBS and Genesis Capital LLC and received legal counsel from King & Spalding LLP.
Tuesday, February 14, 2017
F.R.E. Building Co. List of Land
1. 597 Old Connecticut Path, Framingham, MA- 1.13 Acres 600
Feet Frontage on Mass Pike
2. 101 Milford St, Upton, MA – Proposed 12.44 Acres retail
plaza, 4 parcels available
Parcel A.) proposed 25,000 SF retail building Parcel B.)
proposed 9,000 SF retail building Parcel C.) proposed 43,900 SF retail building
Parcel D.) proposed 9,000 SF retail building
3. 130 Quarry Drive, Milford, MA Build to Suit- 25,200 SF
4. 86 Newell Road, Holden, MA – 55 and over development
5. 45 Traders Way, Salem, MA – 2.70 – 8.75 AC
6. 102 Chestnut Street, Ashland, MA – Proposed 200 Garden
Style Apartments on roughly 4 acres
7. 135 E Union St Ashland, MA- 12.10 Acres
8. 501 Pond St, Ashland, MA- 3.63 Acres
9. 161 Milk Street, Westborough, MA- 9.63 Acres 20,000 Sf
Building on site
10. 393 E Main Street Milford– 12 AC Proposed Hotel Site
Restaurant Chains Offer Valentine’s Day Deals and More
Provided by RestaurantNews.com
Thursday, February 9th, 2017
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