Fairfax is moving to acquire most of Recipe Unlimited Corp and take it private for 1.2BCAD.
This is the company formerly known as CARA which controls two dozen restaurant banners across Canada including Harveys, Swiss Chalet and The Keg among others.
The ~50% premium to current trading price really makes me wish I'd bought in yesterday, LOL
Given the premium, I'm guessing the Fairfax team sees a lot of value in some of those brands, but a lot of deadweight in the others.
I expect some brands to be straight up shut down or be cash-starved and run into the ground, while a select few are overhauled with big injections of cash, then repackaged as a new entity, or to be sold off one by one to the highest bidder.
Either way, I am certain at least one brand of this group will be wiped out by the end of next year,
East Side Mario's is a candidate too, though maybe Boston Pizza might pick them up and rebrand them.
Oh man Pickle Barrel is still around?Certainly plausible. Worth noting, the premium would be substantially lower if compared with just a short while ago, before the recent market dips, so it's not quite as great as it seems; though one hell of a deal if you bought the day before the offer!
I could see consolidating more than that. But I'm not sure I see Harveys being shuttered. I still think it has a better product than BK or Wendy's (not that's saying much); and the chain has been left to languish for years.
But the same could be said of BK Canada, or Wendy's until recently, or A & W until a few years ago. It's really a question of whether they want to put the effort in or not.
I think East Side is a terrible banner myself; but they've just injected money into a very large TV campaign for it; so I imagine they'll wait to see what that yields them anyways.
When you look at their banners some jump out as clear successes, others are much bigger question marks:
Swiss Chalet, St. Hubert, The Keg
Burger's Priest, Fresh
Bigger question marks: (doesn't mean they aren't successful, but rather, what is their longer term growth like)
- Kelseys Original Roadhouse
- Montana's BBQ & Bar
- East Side Mario's
- Prime Pubs
- Bier Markt
- Landing Group
- Casey's Grill & Bar
- New York Fries
- Pickle Barrel
- Original Joe's
- State & Main
- Elephant & Castle
- Taverne Moderne
- Fionn MacCool's
To me, there are way too many pub concepts in there........I can see up to 3 targeting different demos.........
Likewise, the generic 'family restaurant' with mixed menu is done by more than one banner.
i think they've captured some cool concepts over the years that maybe never really lent themselves to franchise models.
That's a pretty interesting list. There are a lot of places where if I was driving along the 401 and had to get out at Belleville or Kingston and eat, I would happily go to.
The ones in Toronto, like the Landings, or Elephant & Castle, I would never go to.