Culver Franchising System Inc. has sold a minority interest to the Atlanta-based private equity group Roark Capital Group, the company told Nation’s Restaurant News.
Terms of the deal were not disclosed. The Culver family will remain majority owners of the Prairie Du Sac, Wis.-based quick-service chain, but opted this year to sell a piece of the company after toying with the idea periodically over the past decade.
“We were looking at doing something as far back as 2007 and then we decided not to do anything,” Culver’s Chairman Craig Culver said in an interview. “Then it was brought up again a couple of years ago. We looked at it again and decided not to do it.
“Close to a year ago, it was brought up again, and we decided to look into it a little more.”
The Culver’s brand has more than 600 locations in 24 states. Its signature menu item is the ButterBurger, as well as frozen custard, but the chain sells from a broad array of menu items that includes pot roast, chopped steak, cheese curds and pork tenderloin.
The Culver family founded the chain more than 30 years ago. Craig Culver noted that he and his siblings are getting older and decided the time was right to bring on another investor.
“We’re all approaching 70,” Craig Culver said. “My sister is 70. I’m 67. My brother behind me is 66. We’re all approaching our older years. We just thought it was the right time.”
Culver said that the company has routinely received interest from private equity firms interested in buying the company. “In the last 15 years, it seems like almost daily,” Culver said. “I’ve said no for a long, long, long time.”
The company picked Roark from among five private equity firms interested in making an investment, he said.
Roark is one of the most active investors in the restaurant space, and has made 20 investments in food and restaurant brands. Earlier this year, the firm acquired 37-unit Jim ‘N Nicks Bar-B-Q, and last year it acquired the sandwich chain Jimmy John’s.
The firm also owns Arby’s Restaurant Group, and Carl’s Jr. and Hardee’s owner CKE Restaurants, as well as Auntie Anne’s and Moe’s owner Focus Brands, Corner Bakery, Miller’s Ale House and others.
Roark has a reputation for buying and keeping its investments far longer than most private equity firms while having its companies concentrate on operations improvement.
“I think the primary objective we had in finding a partner was one that was aligned with our culture and values,” Culver’s CEO Joe Koss said. “We found that in Roark. They’re good people, and their alignment is just a good fit for Culver’s.”
The length of investment was also an important consideration, Culver said. Traditionally, private equity firms look to sell their investments after about five years. “That was very important to us. This will not be a three- to five-year deal.”
Craig Culver will remain as chairman of the company and Roark will put two people on Culver’s board. The Culver family will also remain on the board, and existing leadership, including Koss, will also remain in place.
Culver’s generated $1.3 billion in U.S. system sales last year, according to NRN Top 100 data. That is up 26 percent over the past two years.
“We’re going to be operating our business the way we operate our business, “Culver said. “We’ve been very, very successful.”
In a statement, Roark Managing Director Erik Morris said the firm has “long admired the Culver’s brand and its commitment to culture, quality and service.”
Contact Jonathan Maze at [email protected]
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