Inspire Brands Sells Rusty Taco to Gala Capital Partners

    Under four years of Inspire ownership, the chain's footprint grew by more than 50 percent. 

    Fast Casual | December 19, 2022 | Ben Coley

    Rusty Taco

    Rusty Taco, founded in Texas, operates nearly 40 restaurants.

    Gala Capital Partners announced Monday that it purchased Rusty Taco from Inspire Brands. 

    Financial terms of the deal weren't disclosed. As part of the transaction, Rusty Taco's management team, including CEO Brendan Mauri, has co-invested. The brand has 36 restaurants across one dozen states. 

    QSR recently recognized Rusty Taco this year as one of its best franchising deals. It earns $35.56 million in systemwide sales and an AUV of $1.1 million. 

    "Over the past decade, Rusty Taco has focused on creating a welcoming environment where guests can comfortably enjoy fresh and flavorful tacos, queso, and margaritas, and we are excited to continue this journey with a tremendous new partner, GCP, to guide our next phase of growth," Denise Fenton, brand director and co-founder of Rusty Taco, said in a statement. "I want to thank Inspire Brands for the support and resources that propelled our national footprint, accelerated our growth, and drove increased AUVs and success across our four dayparts."

    Inspire acquired a majority interest in Rusty Taco in 2018 along with its purchase of Buffalo Wild Wings. In the past four years, the company—also parent to Arby's, Sonic, Dunkin', Jimmy John's, and Baskin-Robbins—grew the fast casual's footprint by more than 50 percent. New stores have set opening sales records and are now running at AUVs 50 percent higher than the system average. Additionally, Inspire rebranded the chain from "R Taco" back to Rusty Taco, to highlight the legacy of co-founder Rusty Fenton, who started the company in 2010. 

    Mauri told QSR earlier in 2022 that Rusty Taco spent recent years building growth-ready infrastructure. He noted that multiple franchise agreements signed in 2021 will fuel growth in Utah, Nevada, Virginia, and Texas. He said the brand is capable of opening 40-50 restaurants per year in the future. 

    “Inspire’s tightly integrated shared services model is optimized for brands at scale, and all our scaled brands have ample runway for continued growth. Therefore, we concluded that an owner focused on emerging brands would be the best partner for Rusty Taco’s next chapter of growth,” Inspire chief growth officer Christian Charnaux said in a statement.  “After a thorough vetting process, we believe that GCP is precisely that partner, and we will be cheering on the brand’s continued success.”

    Gala Capital Partners, a Southern California-based private equity firm owned by restaurateur Anand Gala, focuses on franchising restaurants between 25-500 units. Along with Cicis, of which Gala Capital Partners is a non-controlling, minority investor, the firm is invested in Dunn Brothers Coffee and MOOYAH Burgers. 

    “We couldn’t be more positive about bringing Rusty Taco into the GCP portfolio. While the future looks bright, we also know that there’s fantastic opportunity right now for the brand,” Gala said in a statement. “Rusty Taco offers competitive unit-level economics and investment returns, has manageable operations, and is in a dining segment that is on-trend, growing, and lacks strong competition. As a result, Rusty Taco will be a strong addition to the portfolio."

    Genesis Capital, LLC served as financial advisor, and DLA Piper LLP served as legal counsel to Inspire Brands.