Beef ‘O’ Brady’s and The Brass Tap owner FSC Franchise Co. announced Wednesday it acquired Newk’s Eatery during a “record year” for the company that included opening 10 Brass Taps and one Beef ‘O’ Brady’s across the calendar. In regard to Newk’s, which gives FSC its first counter-service brand, CEO Chris Elliott said in a statement the company had been looking to add to its platform for “several years.” It didn’t disclose details of the transaction’s date or financial terms.
“It’s [a] fast casual with average-unit volumes of $2.2 million,” he said, “and it has the same geographical footprints across the Southeast that we currently have, so we’re ecstatic about the partnership.”
“We also had a record year for new deals with our existing brands, and we have another 23 openings in the budget for next year,” Elliott added.
FSC, a company that CapitalSpring holds a controlling interest in, believes synergies between its two full-serves and Newk’s will allow franchisees to become multi-unit and multi-brand owners within the company umbrella.
Elliott noted EBITDA growth in 2023 was 15 percent and should be 15 percent again this coming year. Beef ‘O’ Brady’s launched a 10 @ 10 lineup and The Brass Tap introduced food-truck reminiscent items that helped drive traffic and revenue.
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Both chains are seeing growth activity in Dallas, the Washington and Baltimore areas, and Southern California, Elliott added. In addition to the 23 total Beef ‘O’ Brady’s and The Brass Tap openings on deck, FSC said it was “working to ramp up” Newk’s expansion, targeting 10–15 new locations per year.
“Our restaurant turnover has improved significantly, and the corporate offices are very stable in terms of team members,” Elliott said. “We take a lot of pride in not having a lot of ‘churn and burn,’ and we’re really excited about the future of these brands with the team we have on board.”
Newk’s, founded as Newk’s Express Café by father and son chefs, Don and Chris Newcomb, in 2004 in Oxford, Mississippi (the “Eatery” was added to the name in a 2013 switch), launched a broad rebranding effort in October that included a fresh tagline, “Extra with Every Bite,” as well as an updated look, app, and digital enhancements like the option to buy and send Newk’s gift cards via the platform, and an optimized ordering process enabling users to place in-app orders with greater speed and ease.
The Idea behind it came from a year’s worth of research that centered on the “extras” guests get at Newk’s. Dallas-based creative firm White Unicorn Agency worked alongside Newk’s under the concept of “reimagining tradition.”
The company changed hands in 2014 when the Newcombs and family friend and co-founder Debra Bryson—the team who founded McAlister’s Deli before selling their interests in 1999—dealt a majority of the company to New York investment firm Sentinel Capital Partners, which paid an undisclosed amount for its share of Newk’s Holding Co.
For the full year, Newk’s saw average unit volume increase from $1.5 million in 2020 to over $2 million in 2021. That number in 2022 was $2.065 million for franchised units and $2.386 million for corporate venues.
At the end of 2022, the brand had 100 stores (27 company and 73 franchised), down five year-over-year. Newk’s had 122 stores at the start of 2020 and shed 12 during the first pandemic calendar.
