A well-known casual dining brand, under new private equity owners, seeks a bigger piece of a large market.
By Brian Hartz | Contributing Writer
Beef O'Brady's and the Brass Tap might be part of the crowded field of franchise bar-and-grill-style restaurants. But the brands go to great lengths to give patrons a locally focused look and feel — and in the case of Beef O'Brady's, a little taste of home, even if “home” is a long way away.
Walk into the South Tampa Beef O'Brady's, for example, and you'll find nooks and crannies within the restaurant that have been tailor-made with swag and mementoes that'll fuel the fandom of the area's sizable population of Midwest ex-pats. Michigan, Indiana, Iowa, Ohio State ... there's so much attention to detail in the decor, you'd be forgiven for thinking you wandered into a Big Ten university town bar on game day.
And the Brass Tap — with its emphasis on craft beer, cocktails and fine wines served in a comfortable, well lit, and inviting environment trimmed with brick and timber touches — has become a popular destination for women between the ages of 25 and 45 who want to go out and have a good time but avoid dark, dingy bars.
Expect such approaches to continue under the brands' new ownership, private equity firm CapitalSpring. The New York-based investment group, since its founding in 2005, has invested more than $1 billion into the U.S. restaurant industry. In late June, CapitalSpring acquired Tampa-based FSC Franchise Co., the parent entity of Beef O'Brady's and the Brass Tap, from Levine Leichtman Capital Partners.
Terms of the deal were not disclosed. Erik Herrmann, CapitalSpring's managing director and head of its restaurant investment group, says the move is more of a recapitalization as opposed to an acquisition. There are some 220 units between the two brands, adds Herrmann, with an average of upward of $1 million a year in annual revenue per store. Up next: an investment in the brands in a push for more market share.
“There are many exciting changes happening at FSC as part of this transaction, the most notable of which is that the entire senior management team has chosen to meaningfully invest in the ownership of FSC,” FSC Franchise CEO Chris Elliott says in an Aug. 10 statement. “This commitment demonstrates our deep belief in both brands and the future of FSC.”
Elliott joins FSC Chief Development Officer Jean Baudrand and other top officials who will remain with the firm. “When a private investment group steps in and purchases a company, they don't purchase just an investment; they purchase the management company,” Baudrand says. “They purchase the vision.”
Baudrand adds that CapitalSpring is a better fit for FSC than LLCP, which is more focused on retail in general. “We are very happy because [CapitalSpring is] really focused on the restaurant business,” he says. “It's really good news for us because this is a restaurant-focused, billion-dollar group that really found FSC to be an interesting and relevant investment.”
Baudrand indicated Brass Tap will likely get the most immediate attention from the new owners because it has less market penetration than Beef's. Brass Tap is set to grow from 46 to 55 or so restaurants by the end of the year, he says. In addition to several Tampa Bay area locations, Brass Taps can be found in most of Florida's major metro areas, as well as 11 other states.
Beef O'Brady's, with 209 locations in 23 states, is also set to undergo some changes, Baudrand says. Those include a new layout and interior decor theme in the works that will be rolled out in at least two Florida restaurants this year. The brand's distinctive green-and-yellow color theme might also be phased out, Baudrand adds.
In total, Baudrand anticipates CapitalSpring — which also has invested heavily in household brand names like Taco Bell and McAlister's Deli — will be more closely involved with the development of the Beef O'Brady's and Brass Tap brands. But without micromanaging. Says Baudrand: “They're certainly going to be a lot more involved than our prior owner — and we want them to be.”