Altamont Capital Partners LLC ranked No. 1 in terms of U.S. foodservice revenue growth.

It appeared to be a year of astonishing foodservice revenue growth for the companies topping the Second 100 ranking. For some, growth numbers reached nosebleed levels, but that was largely a result of merger-and-acquisition activity, as investor interest in the restaurant space continued to simmer.

Altamont Capital Partners LLC, for example, which ranked No. 1 in terms of U.S. foodservice revenue growth, recorded a revenue increase of more than 8,500 percent. The year-to-year comparison, however, reflected the private equity firm’s first full year of ownership of Tacala Cos. and sister company Boom Holdings Inc., which operated 162 Taco Bell and 66 Sonic Drive-In units, respectively, in the Latest Year.

At the other end of the spectrum, Yucaipa Cos. saw a more than 16-percent decline in revenue from multiple restaurant closures by holding Picadilly Cafeteria after it filed for Chapter 11 bankruptcy protection in September 2012. After the close of its Latest Year, in April 2014, Yucaipa Cos. lost controlling interest in Picadilly through a reorganization plan that gave majority ownership to creditor Atalaya Capital Management LP.

In fact, the greatest gainers and losers in this year’s Second 100 crop were significantly impacted by similar extraordinary events.

Data

• Company U.S. Foodservice Revenue
• Growth in Company U.S. Foodservice Revenue

The Second 100 company report tracks the domestic foodservice revenue of companies that operate and franchise restaurants in the United States. Those revenues are booked to the entities that hold a controlling interest in such restaurant brands, including private equity investors and multiconcept holding companies — which, not surprisingly, dominated among the top five players in this year’s ranking by revenue growth.

Following Altamont, for example, was Sterling Investment Partners L.P. in the No. 2 revenue growth slot, with a 1,686.8- percent increase in U.S. revenue. A newcomer to the list, Sterling in December 2012 acquired the then-224-unit Pizza Hut franchise company Southern California Pizza.

Also new to the Second 100 is Joh. A. Benckiser GmbH, at No. 3 in revenue growth, with a 1,148.9-percent increase. The Ludwigshafen, Germany-based international holding company in January 2013 acquired the Caribou Coffee chain in a going-private transaction valued at $340 million. Benckiser’s revenue growth also includes a first full year of results for its Peet’s Coffee & Tea concept, which it acquired in 2012.

ACON Investments LLC jumped from the No. 29 revenue growth slot in the Preceding Year to No. 4 in the Latest Year with an almost 280-percent increase in revenue. ACON has been the private equity owner of the Peter Piper Pizza chain since 2006, but more recently the firm invested in 45 Applebee’s Neighborhood Grill & Bar locations in 2012, followed by another 93 of the casual-dining chain’s units in 2013, which contributed partial-year results in the  Latest-Year ranking.

At No. 5 in revenue growth with an 83.2-percent increase, Schostak Brothers & Co. Inc. also benefited from a first full year of ownership of 65 franchised Applebee’s units, which it acquired in September 2012.

In total, the Second 100 companies generated $21.4 billion in U.S. foodservice revenues in the Latest Year, compared with $19.2 billion in the Preceding Year.

At the top of the Second 100 U.S. foodservice revenue ranking was Cheddar’s Restaurant Holding Corp., which moved up from No. 104 in the Preceding Year. The Irving, Texas-based parent to the Cheddar’s chain recorded $352.4 million in revenue, up from $318.4 million in the Preceding Year.

Including sales from both company and franchised locations, Cheddar’s was one of the top 10 fastest-growing restaurant chains among the Top 100 in the Latest Year, with its U.S. systemwide sales up 12.4 percent to $613.2 million compared with $545.8 million in the Preceding Year. The chain ended the year with 150 restaurants, a 16.3-percent increase compared with the Preceding Year, and the company continued a brand refresh that is bringing a more contemporary design to existing locations. That growth benefited the chain’s parent company, whose revenues include royalties and fees from franchised units.

Similarly, Noodles & Company, parent and franchisor to the namesake brand, also climbed the Second 100 ranking, moving from No. 110 in the Preceding Year to No. 103 with $350.9 million in revenue, up from $300.4 million in the Preceding Year — a 16.8-percent increase. The fast-casual Noodles & Company was also among this year’s top 10 fastest-growing Top 100 chains.

Noodles & Company went public last year with the goal of accelerating both franchise and corporate growth. At the end of its April-ended quarter, the chain had 394 restaurants in 30 states and Washington, and in 2014 plans to open between 42 and 50 company-owned units and between 10 and 15 franchised restaurants. Company officials have pledged to reach 2,500 units over the next 15 to 20 years.

By the numbers

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Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout