Who Owns What in the MULO World?
Darden recently made a huge acquisition in the MULO (multi-location) food world, gobbling up Chuy’s fast-casual Mexican locations (100+) in a $605M deal.
According to FSR Magazine, the holding company has also made some major acquisitions over the last decade.
“Chuy’s marks Darden’s sixth acquisition in 15 years. In 2007, the company acquired RARE Hospitality for $1.4 billion, which added LongHorn and The Capital Grille. Four years later, it bought Eddie V’s Prime Seafood and Wildfish Seafood Grille (now closed) for $59 million. In 2012, Yard House joined for $585 million, in 2017, Cheddar’s Scratch Kitchen joined for $780 million, and then in 2023, Ruth’s Chris came on board for $715 million.“
The stakes (or should we say steaks?) are high as brands are purchased, expanded, and reorganized. Of course, Darden is not the only company to own multiple brands. Cheesecake Factory purchased Sam Fox restaurants (including North Italia and Flower Child) for $308M, and Fat Brands acquired nine chain restaurants for close to $1B.
But the dining category is not the only category of MULO “shopping” and consolidation. We recently wrote about how the C-store (convenience store) space is evolving.
The grocery store acquisition aisles have been filled with sales drama. Kroger, Albertson’s & C&S have been working through legal issues but have created a true grocery behemoth that rivals Walmart and Amazon.
Private equity (PE) firms are investing in franchises. This list of who owns what clearly indicates that the MULO world is often a great bet for growth.
However, locations are not the only properties that MULO brands are buying. Retailers invest in other brands to boost product and service availability and bottom lines. For example, Home Depot spent $18B to purchase SRS Distribution. Tapestry acquired Capri Holdings for a whopping $8.5B. That brought Versace, Jimmy Choo, Kate Space, Coach, Michael Kors, and Stuart Weitzman under one corporate roof.
The plus side of these mega acquisitions is that they may create operational efficiencies and new types of leadership and innovation. Investing in technology is imperative in today’s MULO environment; large parent companies make that possible. This can even be valuable in hyper-local search, enabling consumers to find products, stores, and restaurants more easily.
On the downside, service and product quality may suffer if the “giants” pay close attention to the consumer experience and individual operators’ challenges.
Consumers may not ultimately know who owns the store (or the store-within-the-store) or who bought the chickens that make up their chicken nuggets, but they will notice if brands become too large and impersonal to meet their needs or resolve their issues.
In the meantime, continue to watch this space for the latest acquisition updates. Make a modest investment for yourself and your brand, too, and join us at Street Fight LIVE 2024, where you can learn more about MULO trends.
