Canada-based MTY Food Group, which franchises and operates 85 restaurant concepts, is hoping to tack on more.
CEO Eric Lefebvre said the company didn’t find a suitable acquisition target at an attractive price last year. He added that the “team still intends to diligently purse accretive acquisition targets while maximizing the performance of the brands in our existing portfolio.”
MTY’s most recent purchases came in 2022, when it completed the acquisition of Wetzel’s Pretzels for $207 million, and bought 13-unit fast casual Sauce Pizza & Wine. Before that, the group purchased South Street Burger for $5.1 million in March 2019, Papa Murphy’s for $190 million in April 2019, and a majority stake in breakfast concept Allô! Mon Coco in July 2019.
CFO Renee St-Onge said MTY’s strong cash flow generating ability and its debt-to-EBITDA ratio of approximately 2.5 times gives it the flexibility to make acquisitions if an opportunity presented itself.
“We’re still aggressively pursuing acquisitions,” Lefebvre said. “We still want to acquire businesses. As you know, over the years, people have seen it. We’re patient, and we’re disciplined, and we won’t acquire businesses at the wrong price or for the wrong reasons.”
MTY saw many expensive transactions in the market, some of which “were in the stratosphere in terms of valuation, and we’re not prepared to do that,” the CEO said. The group prefers to wait until the market adjusts and the right targets become available.
“Priority is still acquisitions. We still want to acquire businesses,” Lefebvre said. “And the fact that we haven’t acquired in 2024 doesn’t mean we want to pause or stop. It just means that because of our approach and because of how disciplined we are, there was no suitable target, but it doesn’t mean that for the future, there won’t be.”
MTY finished 2024 with 7,079 locations. Of that amount, 6,827 were franchised or under operator agreements. Meanwhile 252 were corporately owned. As of November 30, 57 percent of the footprint was located in the U.S. and produced 66 percent of sales. Eighty-four percent of MTY’s restaurants are streetside or nontraditional while the remaining 16 percent is in shopping malls or office tower food courts.
Some notable quick-service brands under MTY include Baja Fresh, Blimpie, Cold Stone, Pinkberry, and sweetFrog,
Systemwide sales increased 2 percent year-over-year to $1.37 billion in Q4 versus $1.34 billion in Q4 2023. The U.S. segment achieved overall sales growth due to organic growth of 2 percent and a positive impact of foreign exchange rates. U.S. same-store sales lifted 0.1 percent in Q4.
For the year, MTY earned $5.636 billion in systemwide sales, down from $5.641 in 2023. Digital sales were $1.12 billion, growth from $1.027 billion the previous year.
In Q4, MTY opened 92 locations and shuttered 79.
Lefebvre described 2024 as a “year of adjustments” following the acquisitions over the past few years. The company underwent a restructuring process that led to layoffs and redefined roles.
“Although, we need to continue challenging ourselves to further adjust and be more efficient, we anticipate more stability in 2025 as we hope to harvest the fruits of the cost control measures and synergies realized in 2024,” the CEO said. “This should culminate later this year with the delivery of our new ERP, which promises to MTY infrastructure more robust and built for significant future growth.”
