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Thompson Street Stays Hungry

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Thompson Street Capital Partners (TSCP) has acquired Freddy’s Frozen Custard & Steakburgers, a franchisor of fast-casual restaurants. As the chain’s name implies, Freddy’s restaurants feature steakburgers, shoestring fries, and frozen custard.

Freddy’s was founded in 2002 in Wichita, Kansas by restaurateur Scott Redler and brothers Bill and Randy Simon, whose father, Freddy Simon was the inspiration for the restaurant and its namesake.

The company opened its first franchise location in Hutchinson, Kansas in 2004 and opened its 300th location in Indianapolis, Indiana, in 2018. Today, the company has more than 360 franchised locations and over 30 company-operated restaurants across 30 states and is led by CEO Randy Simon and COO Scott Redler.

“When Freddy, Bill, Scott and I started Freddy’s in 2002, our goal was to serve craveable food to our guests with quick-service speed and full-service hospitality at a price that was fair and competitive,” said Mr. Simon. “There remains a large segment of the country where we are not present and by partnering with TSCP we will be better able to expand in those areas and continue our strong growth going forward.”

“When we were introduced to the exceptional team at TSCP, it was apparent that our core values and company culture aligned, making them the perfect fit for our Freddy’s family of team members, franchisees and vendor partners,” added Mr.  Redler.

“Freddy’s is a highly unique, scaled franchisor platform that has built a premium brand over the past two decades with leading franchisee retention, remarkable growth, and a passionate guest following of ‘FredHeads,’ said Bob Dunn, managing partner of TSCP. “We look forward to working with the outstanding team at Freddy’s to accelerate the Company’s already exceptional growth.”

TSCP invests in companies with EBITDA between $5 million and $25 million. Sectors of interest include healthcare and life science services, software and technology services, and business services and engineered products. In July 2018, the firm held a final closing of its fifth fund, Thompson Street Capital Partners V LP, at its hard cap of $1.15 billion.

“Freddy’s presents an exciting opportunity to partner with the founders and management to continue to grow a premier system by accelerating franchise development, increasing focus on marketing and technology deployment, and enabling operational best practices across the footprint,” said Joe St. Geme, a director at TSCP. “We are thrilled to join the Freddy’s family and are excited to invest behind the continued successful expansion of the Freddy’s brand.”

Thompson Street Capital Partners is headquartered in St. Louis.

© 2021 Private Equity Professional | March 5, 2021

Freeman Spogli Acquires Cafe Rio

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Freeman Spogli & Co. has acquired Cafe Rio, a fast-casual Mexican restaurant company, from KarpReilly, which invested in the business in 2004.

Cafe Rio focuses on made-from-scratch food and offers its customers a variety of menu items including burritos, tortillas, salads and tacos. Cafe Rio operates over 100 company-owned restaurants across Arizona, California, Colorado, Idaho, Maryland, Montana, Nevada, Utah, Virginia, Washington, and Wyoming.


Cafe Rio is led by CEO Dave Gagnon and is headquartered in Salt Lake City (www.caferio.com).

“Cafe Rio is a differentiated restaurant concept with a focus on serving craveable food that is 100% made-from-scratch,” said Christian Johnson, a Partner at Freeman Spogli.  “The company’s unwavering commitment to food quality and customer service have engendered an extremely loyal customer following, which has led to strong financial results and an impressive track record of consistent growth.  We are excited to partner with Dave Gagnon, Steve Vaughan and the management team at Cafe Rio as the company enters its next phase of growth.”

Golub Capital (www.golubcapital.com) was the Administrative Agent, Sole Bookrunner and Sole Lead Arranger on a $146 million debt facility to support the acquisition of Cafe Rio by Freeman Spogli. “We have a longstanding relationship with Golub Capital based on their deep sector expertise, professionalism and a track record of mutually-successful investments,” added Mr. Johnson. “Their ability to reliably and consistently provide flexible, growth-oriented financing solutions will benefit the Cafe Rio platform in the years ahead.” Troy Oder, a Managing Director at Golub Capital, led the transaction.

Freeman Spogli invests in middle market consumer and distribution companies. Since its founding in 1983, the firm has invested over $4 billion in 57 portfolio companies with an aggregate transaction value of approximately $22 billion.  Freeman Spogli is presently investing out of FS Equity Partners VII which closed in October 2014 with $1.3 billion in commitments. The firm has offices in Los Angeles and New York (www.freemanspogli.com).

“We are proud of the significant growth Cafe Rio has undergone during our ownership,” said Allan Karp, Co-Founder of KarpReilly.  “During our time together, the company has grown from 6 restaurants in Utah to over 100 restaurants in 11 states today.  We have enjoyed working with the Cafe Rio management team and look forward to watching the business continue to grow under Freeman Spogli’s stewardship.”

KarpReilly invests in consumer growth companies at the lower end of the middle market through a variety of transaction types including growth equity, management buyouts, acquisition financings and recapitalizations. The firm’s investment size is from $3 million to $75 million of equity capital. Industries of interest include retail, e-commerce, direct-to-consumer; restaurants; branded consumer products; apparel; food and beverage; and natural products. KarpReilly is based in Greenwich, CT (www.karpreilly.com).

Piper Jaffray was the financial advisor to Cafe Rio and KarpReilly.

© 2017 Private Equity Professional | September 11, 2017

Roark Capital Acquires Jimmy John’s

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jimmy johns nf1Roark Capital Group has signed an agreement to acquire a majority interest in Jimmy John’s Sandwiches, one of the largest and fastest-growing fast-casual restaurant brands in the nation. Jimmy John’s was ranked No. 1 on Entrepreneur Magazine’s 2016 annual Franchise 500® list.

jimmy johns nf33Jimmy John’s has more than 2,500 locations and $2 billion in system-wide sales and has opened more than 200 locations in each of the last five years, with a new-unit pipeline of more than 1,100 locations to be opened over the next several years. The company was founded in 1983 by Jimmy John Liautaud in Charleston, IL. In 1986 the company opened its second store in Macomb, IL and in 1987 opened its third store in Champaign, IL. In 1994, Jimmy John’s began franchising its operations. The company is headquartered in Champaign (www.jimmyjohns.com).

In January 2007, Mr. Liautaud sold a 33% stake in the company to private equity firm Weston Presidio. Upon closing of the transaction with Roark Capital, Weston Presidio will sell its interest in Jimmy John’s and Mr. Liautaud will continue as chairman and remain the single-largest individual shareholder. James North will continue to lead day-to-day operations of the company as its President and Chief Executive Officer.

“We met Jimmy, James and the team when Jimmy John’s had 500 units and that exact same team has grown the business to over 2,500 units today. Over our 10 years together, Jimmy John’s has generated an outstanding return for Weston Presidio. We are incredibly grateful for their exceptional performance, iconic brand, and rockstar team,” said Jeff Mills, a Partner of Weston Presidio.

Neal Aronson nf1“Jimmy has built an amazing business with unlimited potential,” said Neal Aronson, Managing Partner of Roark. “It’s a testament to his vision, commitment to quality, and the team’s outstanding execution. We are thrilled to be a part of this iconic brand and look forward to supporting its continued growth.”

roark nf3Roark Capital Group invests in consumer and business services companies, with a focus on the franchise, food and restaurant, specialty retail, health and wellness, consumer and business services sectors. Roark’s current portfolio company brands include Anytime Fitness, Arby’s, Batteries Plus Bulbs, Corner Bakery, Driven Brands, FOCUS Brands (the owner of Auntie Anne’s Pretzels, Carvel Ice Cream, Cinnabon, McAlister’s Deli, Moe’s Southwest Grill, and Schlotzsky’s), Hardee’s,  Massage Envy, Miller’s Ale House, Orangetheory Fitness, Pet Supermarket, Pet Valu, Waxing the City, and Wingstop. The firm is based in Atlanta (www.roarkcapital.com).

North Point Advisors (www.nptadvisors.com) served as the financial advisor to Jimmy John’s.

© 2016 Private Equity Professional • 9-13-16

Freeman Spogli Invests in City Barbeque

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city barbeque nf1City Barbeque, a fast-casual restaurant company, has been acquired by Freeman Spogli & Co. City Barbeque operates 26 company-owned restaurants in Ohio, Indiana, Kentucky and North Carolina and also has two legacy franchise locations in Ohio.

City Barbeque’ products are slow-smoked on site, and side dishes and desserts are made from scratch on site as well. In addition to its restaurants, City Barbeque offers catering for weddings, company picnics, large parties, and other events. The company was founded by Rick Malir in 1999 and is headquartered in Columbus (www.citybbq.com).

“This is an exciting moment in our company’s history,” said Mr. Malir. “This partnership allows us to take City Barbeque to new places, give our amazing employees additional opportunities to grow, and bring smiles to new guests and raving fans across the country.” Mr. Malir and a team of barbeque enthusiasts won the American Royal Invitational for the best beef brisket in the country. The American Royal Association – based in Kansas City – is an agricultural trade association founded in 1899. The association annually holds the World Series of Barbecue – the world’s largest barbecue competition.

Brutocao nf1“City Barbeque possesses the exact qualities Freeman Spogli looks for in a restaurant partner,” said Brad Brutocao, a Partner at Freeman Spogli. “The company has craveable food, a passionate management team, an impressive culture of hospitality, and a loyal fan base in each of its markets. We have been interested in City Barbeque for several years, and we are enthusiastic about partnering with Rick and his team during this exciting phase of growth for the company.”

Freeman spogli nf2Freeman Spogli invests in middle market consumer and distribution companies. Since its founding in 1983, the firm has invested over $3.7 billion in 55 portfolio companies with an aggregate transaction value of approximately $21 billion.  Freeman Spogli has offices in Los Angeles and New York (www.freemanspogli.com).

© 2016 Private Equity Professional • 7-1-16

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