Cracker Barrel Old Country Store Inc. and Punch Bowl Social have entered into a strategic relationship with Cracker Barrel taking a non-controlling position in the Denver-based concept, the companies said Tuesday.
Under the terms of the agreement, Lebanon, Tenn.-based Cracker Barrel will invest up to $140 million to acquire its initial non-controlling stake from private-equity firm L Catterton, which made a “significant investment” in the brand in 2017, and to provide growth capital for future development of the restaurant-entertainment concept.
"This relationship represents a tremendous opportunity for the entire Punch Bowl Social family, and we're thrilled to partner with Cracker Barrel," said Punch Bowl CEO Robert Thompson. "Their high-volume, multi-location expertise will help us continue to realize our vision for growth across the country. Our continued goal is to be an experiential Millennial and Gen Z lifestyle brand that creates authentic, social guest experiences.”
Punch Bowl Social, an NRN 2018 Hot Concept winner, was founded in 2012. The restaurant-entertainment hybrid has 17 locations across 12 states and plans to open 11 additional units by the end of calendar year 2020.
Thompson said L Catterton’s investment had been instrumental in the brand’s expansion. "L Catterton has a remarkable track record of supporting and growing great restaurant concepts and has been instrumental as we refined our concept, deepened our real estate pipeline and recruited key talent to the team,” he said.
Punch Bowl Social's model includes Skee-Ball, shuffleboard, bowling and ping-pong, along with a restaurant, bar and patio spaces set in expansive 20,000-plus-square-foot locations. The brand is introducing a more compact 12,500-square-foot model later this week in Fort Worth, Texas.
"We're excited to partner with Robert Thompson and his talented Punch Bowl Social management team to support such a differentiated, high-growth concept," said Sandy Cochran, CEO of Cracker Barrel, in a statement.
"Our investment in Punch Bowl Social is another example of our commitment to driving shareholder value, as it gives us an opportunity to enter a new category with exposure to new guests and demographics while also leveraging our strengths and the similarities between the two companies. Cracker Barrel and Punch Bowl Social are both highly experiential brands that emphasize quality food and beverage, hospitality and fun. We love what Punch Bowl Social has built and are excited about helping them continue to grow."
Cracker Barrel, founded in 1969, has 660 company-owned family-dining locations in 45 states and also owns the six-unit fast-casual Holler and Dash brand.
Update July 23, 2019: This story has been updated to include information on L Catterton selling its stake in Punch Bowl Social.
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