FFL Partners, a San Francisco-based firm that bought Church’s Chicken in 2009 for about $390 million, is reportedly shopping the 1,500-unit chain.
Bloomberg reported it’s working with an adviser to drum up interest from potential buyers, according to people familiar with the matter. The firm is looking for roughly $350 million or more, sources said.
FFL, formerly known as Friedman Fleischer & Lowe, originally bought Church’s from Arcapita Bank BSC, a global investment firm headquartered in Bahrain.
Church’s has about 950 domestic units and 600 international in Canada, Latin America, and the Caribbean, of which more than 270 are Texas Chicken restaurants in the Middle East and Asia. But per a recent franchise disclosure document, Church’s total outlets have declined by 159 restaurants in the past three years.
The company recently unveiled an ambitious brand refresh that capped a three-year strategic plan. It included a new domestic tagline, “Bringing That Down Home Flavor.” Texas Chicken changed its logo and is working on a refreshed store design in preparation of aggressive growth in Asia and the Middle East, CEO Joe Christina told QSR.
Church's nationwide promotion in March was its first national TV campaign in nearly a decade.
The domestic redesign will focus on imagery and terminology to reflect the new down-home flavor positioning, Church’s said. The Texas brand hasn’t really been updated since the late 1980s. Church’s pursued a re-image program in late 2015 and is updating the initiative more than shifting direction. “The domestic business shift was really around how we advertise to our guests. There will be small components like packaging and uniform changes throughout the year, but it was more around how we advertise what we are and what we stand for,” Christina said.
Part of the push was a TV blitz. “We believe we brought new guests in that were very satisfied,” Christina said. “Because while national advertising had stopped, we were still seeing the benefit of that three or four weeks later with those restaurants.”
“The national advertising for us was about expanding our reach,” he added. “Not every Church's restaurant in the U.S. can afford TV advertising, so we do a lot of billboard, digital, radio, and coupons. We wanted to expand our reach into those markets that didn't get TV on a regular basis.”
Opened by George W. Church in 1952, Church’s started as a single store across the street from the Alamo.
Christina stepped into the CEO role in November 2016. He was the company’s EVP of U.S. operations since 2014, overseeing more than 1,150 units in 29 states. Christina served as SVP of Burger King before that.
His first year—also the company’s 65th anniversary—was a foundation-shaking one as the company began its turnaround. Church’s revamped its leadership, most recently with the March hiring of TGI Fridays and Burger King vet Brian Gies as CMO to replace Hector Munoz.
From 2015 to 2016, Church’s total U.S. store count dropped 55 units to 1,076. Total systemwide sales (in millions) fell to $800.27 from $838.0, and average-unit volume declined to $724,000 from $729,000.
In 2017, Church’s finished the year with a total of 1,009 domestic units—a year-over-year decline of 61—and systemwide sales of $785.96 on average-unit volumes of $779,00.
Church’s would be the latest in a string of restaurant M&A activity. Blimpie owner MTY Food Group Inc. bought Papa Murphy’s for about $190 million in April. Recent reports also say Perkins & Marie Callender’s is seeking a buyer.