Quiznos parent High Bluff Capital Partners announced Monday that it has agreed to purchase Church’s Chicken from FFL Partners.
Terms of the deal weren’t disclosed. High Bluff’s acquisition is supported by various alternative investment funds managed by FS Investments.
Church’s, which has more than 1,500 locations in 26 countries and international territories, will enter High Bluff’s portfolio with a clear runway for expansion. The 69-year-old company is on pace for another year of positive growth after reaching nearly $1.2 billion in systemwide sales in 2020. In the U.S. alone, Church's earned roughly $740 million in sales in 2020 and an AUV of $820,000, according to the QSR 50.
At the end of June, the brand reported comps were increasing 15 percent systemwide year-over-year and that average check was growing more than 30 percent. The chain is also ahead of where it was in 2019 when it surpassed a 10-year company record for systemwide sales. The company expects to open almost 100 restaurants worldwide in 2021, up from 79 new openings last year.
The transaction is expected to close during Q3.
“The past few years have been all about growth for the brand and its franchisees,” said Church’s CEO Joe Christina in a statement. “Our focus will be to deliver against our strategic plan with new locations in the U.S. and internationally and continued profitable sales growth.”
“I am proud to continue leading the brand with High Bluff and the solid backing of FS Investments, which will give us the added momentum to truly realize our Vision to be the Global Franchisor of Choice,” he continued. “I thank our teams and franchisees around the world for their ability to deliver and establish a framework to expand what we’re capable of accomplishing as a team.”
High Bluff established restaurant platform REGO Restaurant Group in 2018 when it bought Quiznos and Taco Del Mar. Since then, the investment firm has driven transformative initiatives, especially for Quiznos. In early 2021, the sandwich chain announced a refreshed store prototype featuring updated designs, new menu items and cooking equipment, and drive-thru aspirations.
High Bluff founder Anand Gowda said the firm’s investment strategy centers on identifying brands with long-term connections with consumers that can be elevated with industry expertise, operational efficiencies, innovation, and creative brand management. He believes Church’s fits perfectly into that strategy.
“At a time when the entire restaurant industry has faced unprecedented challenges, Church’s has stood out as a notable bright spot, having emerged from the pandemic with considerable tailwinds that strongly position the brand for tremendous growth geographically as well as in the overall chicken category,” Gowda said in a statement.
Church’s sales growth has accelerated due to the launch of long-planned advancements in digital marketing, order head, and delivery. Order ahead and takeout orders increased 540 percent in 2020, along with a 77 percent lift in third-party delivery. A new website, channel strategy, and mobile welcomer (location finder) were rolled out to help guests go from first impression to desired action within three clicks. Since launching the mobile welcomer, conversion increased 27 percent among mobile users, and digital restaurant engagements grew 295 percent. Church’s also made dramatic enhancements to its new mobile app, email platform, and launched a new customer database, which helped active loyalty engagement grow 40 percent in 2020.
Additionally, Church’s was named a top workplace for 2021 by the Atlanta Journal-Constitution. To improve employee work-life balance, the brand is activating a new Hybrid Model for restaurant support center employees in Atlanta. As part of the model, workers will spend three days in office and two days remote. It officially launches in 2022.
Moelis & Company LLC served as the M&A advisor to High Bluff and FS Investments, and exclusive placement agent to High Bluff; Paul, Weiss, Rifkind, Wharton & Garrison LLP and Dentons US LLP served as legal advisors to High Bluff and REGO Restaurant Group; Orrick, Herrington & Sutcliffe LLP served as legal advisor to FS Investments.