Industry News | April 13, 2010

Roark Capital Group Takes Chain Under its Wing

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In its fifth deal in the last six months, Roark Capital Group, an Atlanta-based private equity firm specializing in franchising, announced today that its affiliate has acquired Wingstop Restaurants, Inc., the chicken wing chain that was recently recognized by Technomic as one of the 10 fastest growing concepts in the U.S.

Having sold over 2 billion wings since being founded in 1994, Wingstop generated more than $300 million in system-wide revenues in 2009. The Richardson, Texas-based chain currently has more than 650 restaurants open or in development in 34 states and in Mexico, and it plans to open more than 60 restaurants in 2010.

“Roark invests in franchises with a proven track record in the marketplace and potential for significant growth,” says Steve Romaniello, managing director at Roark. “With 27 consecutive quarters of positive same-store sales, Wingstop is a clear leader in its category.”

James Flynn, Wingstop’s CEO, and the senior management team, will all remain in their current roles. Flynn joined Wingstop in 2003, and has spearheaded the chain’s expansion from 90 restaurants to the more than 650 that are open or in development today.

“We believe the partnership between Wingstop and Roark is a perfect fit,” Flynn says. “Our ability to leverage Roark’s strong background and deep resources within the restaurant and franchise industry will allow us to more aggressively grow the Wingstop brand and also provide new opportunities for our existing franchisees.”

“Wingstop is a highly differentiated category leader with strong unit-level economics and broad consumer appeal," says Erik Morris, managing director at Roark. "We are excited to be partnering with Jim and his team and look forward to supporting the company’s growth initiatives.”

With this latest transaction, Roark has now acquired 17 franchise/multi-unit brands that collectively have more than 45,000 points of distribution, 3,000 franchisees, and more than $4 billion in system-wide revenues across 50 states and 36 countries. Its current franchise portfolio includes such well-known brands as Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, McAlister’s Deli, Money Mailer, Fast Signs, Batteries Plus, Primrose Schools, and Pet Valu.

Roark has seen significant activity during the past six months, including the acquisition of franchisor Pet Valu, Canada’s leading small-format specialty retailer and wholesale distributor of pet food and supplies.

Roark also recently invested $100 million in Waste Pro USA, a non-hazardous solid waste management services company, as well as investing additional funds in its portfolio company PSC to support its acquisition of North Shore Agency.

Earlier this year, Roark acquired a majority ownership position in Peachtree Business Products, a Marietta, Georgia-based multi-channel marketer of specialty business products and marketing materials for residential property managers, parking facilities, and other end markets.