Restaurant Franchise Houlihan's Obtains $68 Million for Nationwide Growth Strategy
Cash Infusion Fuels Accelerated Corporate Growth and Continued Franchising Expansion
Leawood, KS (May 22, 2007) -- Houlihan's Restaurants, Inc., the nation's leader in stylish, casual dining, announced today that it has received more than $68 million to fuel national expansion of the newly positioned Houlihan's brand and build on the success of its existing 105 locations.
The financial transaction involved $28 million in private equity from Goldner Hawn Johnson & Morrison, a private equity investment firm based in Minneapolis, Minnesota, as well as $40 million from a new senior credit facility provided by Wells Fargo Foothill Restaurant Finance, part of Wells Fargo & Company (NYSE: WFC). Houlihan's system-wide sales are projected to exceed $350 million for 2007.
"Partnering with Goldner Hawn and securing a line of credit gives us access to capital for carrying out our growth strategy more effectively," said Bob Hartnett, Houlihan's CEO.
Founded in Minneapolis in 1989, Goldner Hawn invests in seasoned, middle-market companies that are headquartered in the Midwest, have capable management teams, distinct market advantages and clear growth potential. Goldner Hawn has made 27 private equity investments through the company's Marathon Fund partnerships and has established long-term relationships with many of America's leading financial institutions to support its investments. Including the Houlihan's investment, Goldner Hawn investments have total transaction values exceeding $2.6 billion.
"We invest in companies that share our traditional Midwestern values of hard work and efficiency, long-term strategic planning, integrity and a partnership with its employees and communities they operate in," said Darren Acheson, Managing Director of Goldner Hawn. "Houlihan's perfectly fits that model. Its newly positioned brand is very compelling, and based on the success of the new prototype model, as well as its strong brand recognition and solid infrastructure, we see tremendous future potential. We look forward to partnering with the management of Houlihan's as they position the company for its next phase of growth."
Acheson was referring to the new "Houlihan's of the 21st Century" design, which successfully debuted with a Chicagoland location in May 2006. Houlihan's has since opened several additional new prototype stores around the country. The prototype restaurants, which feature new architecture, interior design, uniforms, music, menu format, patio-style dining and a spacious, centerpiece "ageless" bar, have each experienced solid, consistent sales figures that are well above system-wide averages. The most recent location modeled after the new prototype opened last month in San Antonio, Texas. The new prototype building is approximately 6,300 square feet and costs approximately $2.2 million to build.
"As the premier lender to the restaurant and hospitality industry, we're excited to be able to participate in the future success of the Houlihan's brand and happy to support this strong management team," said Rod Guinn, Managing Director with Wells Fargo Foothill. "We have followed the company's progress and management team for several years, and were able to act quickly to provide the flexibility and pricing Houlihan's was seeking."
Houlihan's also recently announced a new strategic growth plan to open more corporate locations and limit franchise deals to highly experienced, "cream of the crop" market developers. As part of the shift in growth strategy, Houlihan's is focusing on attracting sophisticated franchise operators to develop entire markets. Houlihan's also expects to open 10-20 new corporate-owned restaurants per year. Currently at least 30 new corporate Houlihan's locations are in various stages of development in Denver, San Antonio, Pittsburgh, Charlotte, Kansas City, St. Louis, Dallas, Chicago, Philadelphia, Indianapolis and Atlanta.
Hartnett noted that in addition to continuing to attract experienced, multi-unit developers, Houlihan's is focusing on growing its base of corporate-owned stores to ensure that newly introduced design and personality elements of the brand are well represented and consistent across markets.
"While we will continue to utilize the franchising model, moving forward our franchise growth will be limited to experienced, multi-unit/multi-concept developers who have an infrastructure capable of executing sustained development and operations," Hartnett said. "This proven standard of operating excellence will give all of our guests an excellent Houlihan's experience at every single location."
Established in 1972, Houlihan's is a progressive concept that bridges the gap between fine dining and what people have come to expect from casual dining, priding itself on style and quality appropriate for any occasion, any day of the week. Houlihan's offers guests an inviting atmosphere, eclectic menu and energetic bar environment with creative, diverse drink offerings. Inspired by fare around the globe, Houlihan's crafts dishes made from scratch with assertive flavors, offering a unique culinary experience.
Currently, 92 Houlihan's restaurants operate throughout the country, 61 of which are franchised, and company executives estimate approximately 30 new locations will open in the next two years. Houlihan's is owned by Houlihan's Restaurants, Inc. of Leawood, Kansas, a pioneer in the full-service, casual dining industry that developed and owns several restaurant concepts comprising of approximately 105 locations from coast to coast, including Bristol Seafood Grill and Bar/Devon's Seafood Grill and Bar and J. Gilbert's Wood-Fired Steaks. For more information, visit www.houlihans.com
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