McDonald’s Corporation (NYSE: MCD) and Fazoli’s, a fast-casual Italian restaurant concept based in Lexington, Kentucky, have agreed to form a joint venture to develop 20 to 30 Fazoli’s restaurants in three U.S. markets. McDonald’s will also have an option to purchase the entire company at a later date. The agreement finalizes a deal originally outlined in a letter of intent signed by Fazoli’s and McDonald’s last April.

Fazoli’s operates more than 400 restaurants in 32 states. Their menu focuses primarily on pasta and also offers Italian Submarinos® and panini sandwiches and salads.

“A strong Italian restaurant brand like Fazoli’s is an exciting addition to the portfolio — and the joint venture will help us further explore the potential of the brand,” said Russ Smyth, President, Partner Brands, McDonald’s Corporation.

Fazoli’s President and CEO Kuni Toyoda said, “We are excited about the joint venture and what it means for the future growth of Fazoli’s. The combination of our brand and knowledge of the Italian segment with McDonald’s resources and expertise in site development, supply chain, and other business systems is a great formula for success, and creates real opportunity for our employees.”

The joint venture will be headed by Raymond Mines, former EVP of System Relations for McDonald’s Corporation. The joint venture will take over management of the existing Fazoli’s market in Denver and will introduce the brand in two new markets, which are still being identified.