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Fogo de Chão Announces Plans to Enter Canada​

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Fogo de Chão Announces Plans to Enter Canada

Global restaurant brand continues expansion momentum with 10-unit deal with premier developer Debut Development Group...
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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

 
Northern Light said:
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

Click to expand...

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, and I would put my money on it being Harvey's. A&W is everywhere all of the sudden while in comparison Harvey's has consistently retreated.
EDIT: a check online shows A&W recently passed 1,000 locations in Canada. Harvey's website says they are now down to 293, almost all in Ontario and Quebec.

East Side Mario's is a candidate too, though that one I could see being sold off as a stand alone, perhaps to Boston Pizza as they could pick them up and rebrand some of them and close others.
 
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Jonny5 said:
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.
Click to expand...

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!

Jonny5 said:
Either way, I am certain at least one brand of this group will be wiped out by the end of next year,
Click to expand...

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.

Jonny5 said:
East Side Mario's is a candidate too, though maybe Boston Pizza might pick them up and rebrand them.
Click to expand...

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:

Successes:

Swiss Chalet, St. Hubert, The Keg

Strong promise:

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.
 
Northern Light said:
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:

Successes:

Swiss Chalet, St. Hubert, The Keg

Strong promise:

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.
Click to expand...
Oh man Pickle Barrel is still around?
 
Jonny5 said:
Oh man Pickle Barrel is still around?
Click to expand...

Indeed, and with several locations in the GTA too.

1660156113872.png
 
East Side Mario's has an astounding 67 locations, but the vast majority are in Ontario, though only 1 in Toronto. (most successful market, London, ON with 3)

Montana's is 99 locations (terrible food and service.........sigh)

Bier Mrkt is a mere 4 locations

Kelsey's is 67 locations, all but 2 in Ontario

Harveys is 293 locations

Burger's Priest is 28 (25 in Ontario, 3 in AB)

NYF is 120 locations in Canada and 36 overseas.

Finn is 23 locations

Landing Group is only 7 locations

OJ is 56 locations, entirely in western Canada

E&C are only 2 locations in Canada, but interestingly 5 in the U.S.

S&M are 25 locations
 
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.
 
Casey’s was originally a Northeastern Ontario chain, which expanded considerably when it was owned by Prime Restaurants & Pubs, but after Cara’s purchase, most were replaced with Fionn McCool’s or the new “Landing” brand. A few haven’t been converted yet, mostly in the North.

They really could consolidate those brands. Cara seemed to have the tiers done right two decades ago, before they doubled in size (though dumping Second Cup and the Canadian rights to Outback).
 
evandyk said:
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.
Click to expand...

I have eaten at Hunters Landing, Kellys Land and the former Williams Landing. They are all boutique pubs, overpriced ones at that.
 
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