High Bluff Capital Partners, parent of Church's Texas Chicken, Quiznos, and Taco Del Mar, announced Monday that it will acquire 81 Hardee's locations out of bankruptcy, pending court approval.
The sale hearing is set for July 18, and the transaction is expected to close in August.
The locations are spread across Alabama, Florida, Georgia, Kansas, Missouri, Montana, South Carolina, and Wyoming. High Bluff said the portfolio aligns with its strategy of investing in brands that have a strong presence in underserved markets, but come with "opportunity for significant growth and value creation."
The restaurants will be run by Dave Dixon, a veteran of KFC, Burger King, Culver’s, Popeyes, Church’s, Slim Chickens, and Hardee’s. Between 2000 and 2003, he led the turnaround of 116 Hardee's stores and increased sales by 35 percent.
“Hardee’s is a regionally strong brand, known for its quality, hand-crafted menu,” High Bluff Capital founder Anand Gowda said in a statement. “These restaurants in many cases have served as central neighborhood hubs, where people and families come to gather and connect. It’s in areas like these where we see the greatest opportunity to create value by truly having a positive impact on local communities and the people who call them home. Guests aren’t just craving delicious food, they’re craving togetherness and we are thrilled to partner with the Hardee’s team to deliver that.”
Large Hardee's operator Summit Restaurant Holdings declared bankruptcy in May. The group once oversaw more than 145 stores across 14 states, but it had shuttered 39 restaurants prior to bankruptcy. The franchisee fell victim to declining foot traffic, wage increases, inflation, and labor constraints, along with rental obligations, debt, and other liabilities. The company owed $22.1 million in secured debt and $6 million in unsecured debt, including royalties, advertising contributions, and other amounts to CKE Restaurants.
Under the name ARC Burger, High Bluff Capital served as the stalking horse bidder, meaning that it was in the driver's seat and set the minimum for the sales auction. Court documents state that High Bluff Capital was looking to spend $11.7 million to buy 53-73 restaurants, with the potential to add up to 15 more.
“Throughout this process, we have maintained that the restaurants would be sold to a qualified and well-capitalized buyer with demonstrable success across the restaurant, food and beverage markets,” CKE Restaurants CEO Max Wetzel said in a statement. “With an impressive track record of growing numerous consumer brands, High Bluff is the ideal partner to support our efforts to deliver outstanding service and the foods our core customers crave, while making critical investments in restaurant remodels and other initiatives designed to boost traffic and sales.”
High Bluff Capital describes itself as a "private investment firm that specializes in making control-oriented equity investments in iconic consumer-facing companies." It purchased Quiznos and Taco Del Mar in 2018 and Church's in 2021 for undisclosed amounts.
Coady Smith, a principal at High Bluff Capital, said the firm plans to "aggressively pursue" more acquisitions in the coming years. The goal is to reach six to 10 concepts with $75 million to $100 million of EBITDA.