Dine Brands to acquire Fuzzy’s Taco Shops
Dine Brands is adding a third banner to its portfolio.
Dine Brands Global has agreed to acquire Fuzzy’s Taco Shop from Experiential Brands LLC, a subsidiary of NRD Capital Management, for $80 million. Dine Brands is one of the world’s largest full-service dining companies and franchisor of Applebee’s Grill + Bar and IHOP restaurants, with more than 3,400 restaurants combined in 16 countries and 338 franchisees.
Founded in 2003 and based in Fort Worth, Texas., Fuzzy’s is a fast-casual restaurant chain serving Mexican favorites. The company has 138 franchise- and corporate-owned locations in 18 states. Fuzzy’s has long-term development agreements currently in place to nearly double its current restaurant base over time.
“Fuzzy’s Taco Shop is a compelling business with a loyal customer base and a distinct identity,” said John Peyton, CEO of Dine Brands. “It is an attractive asset with a tremendous growth trajectory and will be a complementary addition to our highly franchised portfolio. By adding Fuzzy’s to the Dine Brands family, we are investing in a high growth concept as part of our longer-term growth agenda, which is aligned with our strategy to build shareholder value.”
Fuzzy’s management team includes CEO Paul Damico, a 35-year industry veteran at Focus Brands, Moe’s Southwest Grill, and Global Franchise Group.
“Paul and his team have done a tremendous job creating a solid foundation for the business, as evidenced by its attractive financial profile and differentiated brand positioning within its segment,” added Peyton. “We are eager to work with Paul and his leadership team as we execute on accelerating Fuzzy’s growth.”
Since acquiring a significant majority stake in Fuzzy’s in 2016, NRD partnered with founder Mel Knight to nearly double the restaurant count while improving underlying unit-level economics for franchisees.
“We had many options when evaluating the ideal partner to help accelerate the growth of Fuzzy’s Taco Shop,” said Knight. “We selected NRD because of their operator-centric mentality, flexible capital and unparalleled franchising experience. Without a doubt, they over-delivered on each promise and initiative. Partnering with NRD to improve our unit level economics and supercharge franchise development was instrumental in leading Fuzzy’s to be the successful national brand that it is today.”
“This transaction is a textbook example of how NRD identifies and grows brands, which can result in successful outcomes for all stakeholders, including company management, company employees, franchisees and investors of NRD Capital,” said Aziz Hashim, NRD’s managing partner. “NRD is incredibly proud of the work it has done alongside the talented Fuzzy’s Taco Shop team to drive growth and propel value creation.”
Arlington Capital Advisors served as exclusive financial advisor to Fuzzy’s Taco Shop, with Cheng Cohen LLC serving as legal advisor to Fuzzy’s Taco Shop and NRD Capital. Centerview Partners LLC served as exclusive financial advisor to Dine Brands, with Sidley Austin LLP serving as legal advisor.