Restaurant giant in $1.8 billion acquisition
Popeyes Louisiana Kitchen is about to get a new owner.
Restaurant Brands International Inc., owner of Burger King and Tim Hortons, announced it would acquire Popeyes Louisiana Kitchen for $1.8 billion in cash.
"Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” said Daniel Schwartz, CEO, Restaurant Brand International, which operates more than 20,000 locations under the Burger King and Tim Hortons banners. "With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth. We look forward to taking an already very strong brand and accelerating its pace of growth and opening new restaurants in the U.S. and around the world.”
Following the closing of the transaction, Popeyes will continue to be managed independently in the United States.
Based in Atlanta and Oakville, Ontario Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canada’s Tim Hortons for $11 billion.
Popeyes, which was founded in New Orleans area in 1972, operates more than 2,600 restaurants, of which 1,600 are in the United States.
Cheryl Bachelder, CEO of Popeyes, said, " As Popeyes enters its 45th year, its success reflects the amazing brand entrusted to us by founder Al Copeland, Sr. and the unique high trust partnership that we enjoy with our franchise owners. RBI has observed our success and seen the opportunity for exceptional future unit growth in the U.S. and around the world. The result is a transaction that delivers immediate and certain value to the Popeyes shareholders."
Not so fast on Popeye's....
Just heard this morning ARBY'S parent company is also bidding....Now the action begins! :)
Restaurants at retail: What’s the recipe for success?
Restaurants are the current darlings of the shopping center developers. It was reported last year that Americans spent more money at bars and restaurants (a total of nearly $55 billion) than they did on groceries. In case you were wondering how big a deal that is, consider this: It was the first time in recorded history that that was the case. But that’s not the only reason that shopping center owners are mad for restaurants. They are also hubs of social activity that contribute to that all-important and often elusive experiential energy.
Restaurants are not just a good choice, they are sometimes the only choice. In some markets and for some projects, it seems as though viable restaurant tenants (along with a rapidly expanding selection of entertainment uses) are plentiful, while the supply of retailers is more and more limited. Turbulence and change in an evolving retail sector are obviously playing a role in this situation, too, with the industry going through a period of post-recessionary and omnichannel-driven reorganization.
In a retail marketplace in which it can feel as though the only constant is change, and where sure things now come with question marks, the leasing of centers is more challenging than ever. It is not uncommon for projects that may have planned to include about 25% restaurant tenants ultimately ending up with closer to 50% or more.
This is not necessarily a bad thing. In many ways, restaurants are the ideal tenants for improving the social and economic viability of a retail or mixed-use environment. But there are also some reasons for caution. With so many new concepts and so many new restaurants hitting an already crowded marketplace, concerns about oversaturation are always present. Restaurants are challenging to manage and operate, and they notoriously struggle to sustain consistent quality and service. Developers don’t want to look a gift horse in the mouth, but if can be unwise to bet the load on that one horse.
Here are just a few of the issues that wary brokers, developers, and landlords are keeping top-of-mind as they ride the restaurant wave to full lease-up:
With larger numbers of restaurants comes a problem that has come into focus over the past 12-18 months: A lack of skilled cooks and qualified labor to fill kitchen positions. There are fewer prospective kitchen workers willing to work under highly demanding conditions for relatively modest pay – a problem that could be exacerbated by the immigration policies of the Trump administration. Something has to give. Salaries, and thereby prices, will most likely have to go up.
The influx of new restaurants means an increase in competition. Fine dining, family restaurants, fast-casual concepts, and traditional QSR brands are all jockeying for position along with grocery and specialty markets offering more prepared foods. Then there are the delivery and cook-at-home concepts being served up on the internet. In this crowded field, it pays to have a good feel for who is going to thrive and who is going to dive. Some of the most creative and inspired chef-driven restaurants ultimately do not make it. Real estate professionals would be wise to pay close attention to financials and prioritize proven staying power.
Strike a balance
While national-credit restaurant tenants tend to be safer bets, taking some calculated risks is a critical component to creating a destination. A hot concept or a popular local or regional player can help differentiate a project and drive dollars and traffic. The key for center owners is to strike a balance between established names with familiar drawing power and smaller innovative local and regional independents that generally do a better job of connecting with the community and their customers.
Plan for flexibility
The best mall and shopping center owners and developers will ensure that restaurant spaces and pads are designed to easily be repurposed or renovated for other uses. Strategizing for what could happen two, five, or 10 years down the road is the recipe for success in the food and beverage category.
Stephanie Skrbin is a Principal of Avison Young based in Los Angeles .She can be reached at [email protected].
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Richmond-area center to be sold at auction
The Shops at Stonehenge in Chesterfield County, Virginia, south of Richmond, will be sold in a foreclosure auction this week, according to a report in the Richmond Times-Dispatch.
The 3.8-acre center, which was last sold in 2007 for $6.95 million, is situated near a Sam’s Club and contains Q Barbecue restaurant, Cato Fashions, and Domino’s Pizza.
The Tysons Corner office of the Venable law firm will hold an auction on Friday, February 24, at the front entrance of the Chesterfield Circuit Court building at 9500 Courthouse Road.
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