With butterfly PE backing, Modern Restaurant Concepts plans growth after Qdoba Buy | Franchise Mergers and Acquisitions

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Since founding Modern Restaurant Concepts in 2019, Rob McColgan has been looking for another brand that’s better for you to add to his umbrella company, which previously consisted of Modern Market Eatery and Lemonade. With the backing of Butterfly Equity, the Los Angeles-based private equity firm that first invested in both brands, the group will acquire Qdoba Mexican Eats, a nearly 750-unit fast-casual franchise from which Butterfly-Co -CEO Adam Waglay said it was “a ton from the top.”

“We looked at multiple targets, and the top two targets were in the Mexican region,” said Waglay, who highlighted Qdoba’s attractive return on investment and lower grocery costs. And while the price – Butterfly buys Qdoba from Apollo Global Management – and other terms of the deal weren’t disclosed, he noted, “A big reason we were excited is that we feel like we can.” at an unbelievable price.”






Adam Waglay is Co-CEO of Butterfly Equity, a Los Angeles-based private equity firm that has invested in Modern Market Eatery, Lemonade and now Qdoba in its acquisition of Apollo Global Management.


According to the , Qdoba generated $921 million in system-wide revenue in 2021 Franchise Times Top 500 Database. The deal will bring MRC’s platform to approximately 800 locations in every US state. As part of the transaction, which is expected to close in October, King Street Capital Management, a global alternative wealth manager, is investing alongside Butterfly.

“You gain so much from size in the restaurant industry. That’s why there are a lot of publicly traded companies with multiple brands,” said McColgan, who will become co-CEO of the group and will lead Modern Market and Lemonade, while Keith Guilbault, chief executive of Qdoba, will continue to lead that brand and be co-CEO of MRC .

“You gain a lot of efficiencies when you can share services across multiple departments. What works for one brand often works for another brand.”

McColgan said Qdoba’s tasty menu, positive guest experience and “true uniqueness in the Mexican fast-casual space” stood out when evaluating potential acquisition targets.







*Rob McColgan.jpg

Rob McColgan co-founded Modern Market Eatery in 2008 and founded the better-for-you umbrella company Modern Restaurant Concepts in 2019 with the acquisition of Lemonade.


McColgan co-founded Modern Market Eatery in 2008 with a mission to create a restaurant where customers can eat every day and feel better after eating. “It comes down to the ingredients, a lot of preparation and control over what goes into the food,” he said. “Qdoba does a lot of preparation and fresh cooking in the restaurant every day, which was the most important factor – at the top with a people-influenced culture.”

See also: New Concept Modern Market Fights “Horrible” Food Syndrome

San Diego-based Qdoba’s franchise network and expertise also attracted McColgan, who hopes to expand all three brands through franchised, corporate and licensed units. “Seeing how a successful franchisor like Qdoba is already doing this will be a big part of this deal,” he added. Earlier this year, Qdoba announced its largest multi-unit deal in the company’s history, an agreement with a former Dunkin’ franchisee to bring 30 units to South Florida.

In contrast, Modern Market has 24 company restaurants, although it recently signed its first franchise deal, a 40-unit deal to bring the brand to seven states. Lemonade is a fast-casual concept with a healthy twist and has 20 units in California.

Food industry specialty at Butterfly

Waglay and Butterfly co-CEO Dustin Beck founded their company in 2016 after meeting at Goldman Sachs about a decade earlier. Meanwhile, while working on KKR’s consumer retail private equity team and focusing on the grocery sector, Waglay said he thought, “Why aren’t there more grocery funds?”

In June 2016, Butterfly invested in Lemonade along with KKR and acquired Modern Market in 2018. Other companies in his portfolio include Pacifico Aquaculture, a producer of sea-raised striped bass, food and beverage company Bolthouse Farms and egg producer Pete and Gerry’s Organics. The company closed this month with a second fund of $1 billion and now has nearly $4 billion in assets under management.

“We want to be a full-spectrum investor,” Waglay said, and he expects franchising to be a powerful growth vehicle for the company.

Beck noted that their goal is to be more than just a financial partner by also providing strategic and operational insight. “We actually have more operators than investors on the team,” he said, one of whom was Paulo Marchesan, who ran a multi-unit Häagen-Dazs franchise and was an executive at Restaurant Brands International from 2011 to 2017, where he was focused his Burger King store.

“We’ve built our entire business and team around where the operations team can add value,” said Beck. At Qdoba, Waglay sees opportunities to invest more in marketing to drive traffic and help the brand maximize its off-premises channels.

full circle moment

“It’s kind of amazing,” McColgan said, recalling his first dining experience at Qdoba nearly 15 years ago. McColgan, a former New York Stock Exchange trader and independent investment advisor, left Wall Street in 2008 after about six years to found Modern Market Eatery.

On the first trip to Colorado, before he and his wife moved there, they had lunch at Qdoba at the Denver Tech Center and talked about what would change after jumping into entrepreneurship.

“Now looking back almost 15 years later and having started an amazing concept at Modern Market that we are very proud of and then also expanding that kind of overall mission of creating great food with great ingredients and bringing it to as many people as possible – and to know that we will be working on such a great brand as Qdoba – is just fantastic,” he said.

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