Largest Applebee’s franchisee adds Taco Bell to portfolio
Apple American Group acquires Southern Bells Inc., franchise group of 76 restaurants
Mon, 2013-01-14 17:11
Last month, San Francisco-based Apple American Group acquired Southern Bells Inc., a franchise group of 76 restaurants — mostly Taco Bell but also some KFC and Pizza Hut units — in Indiana, Illinois and Kentucky.
Terms of the deal, which closed Dec. 17, were not released. But Greg Flynn, chair and chief executive of what is now called Flynn Restaurant Group LLC, said the acquisition will bring about $97 million in revenue to the company, raising its annual systemwide revenues to about $1.25 billion and making it one of the largest franchise operations in the U.S.
Flynn Restaurant Group now holds two divisions: Apple American Group, which operates 438 Applebee’s restaurants, and Bell American Group, with 76 Taco Bells and sister brands.
For Flynn, the time was right to branch out with a second concept. He first got into the Applebee’s franchise business in 1998 and deliberately focused on building one brand, in part, he said, because “anything you focus on you’ll do better,” but also because business was going very well.
The group has steadily grown its Applebee’s holdings through both acquisition and opening new restaurants. Most recently in November, Apple American acquired 99 of the casual-dining restaurants from a Poland-based franchise group, AmRest Holdings, for $94.8 million — the biggest deal the group had ever done, Flynn said.
He said he remains “very high” on Applebee’s, and the franchise group will continue to grow the casual-dining brand. Recently, however, Flynn said the company had scaled to the point where it made sense to add a second concept.
After a review of the industry, Flynn decided Taco Bell showed the most promise. He said he was very impressed by how Taco Bell turned around sinking sales last year to show industry-leading same-store sales gains with the introduction of the Doritos Locos Tacos line, along with the Cantina Bell menu that competes with fast-casual players such as Chipotle Mexican Grill.
“They had a stellar year on the back of excellent product launches and promotions,” Flynn said of Taco Bell. “And the pipeline for this year looks incredibly strong.”
Bell American Group is planning more acquisitions and will also be opening new units. "We love building restaurants," said Flynn.
In 2011, Apple American received a “strategic growth investment” from Goldman Sachs Capital Partners, which joined current investment partner Weston Presidio and members of the management team.
Growth of the Taco Bell brand will not be at the expense of the group’s Applebee’s, Flynn said. “Apple American is our mothership, our first love,” he said. “We think it has great prospects going forward.”
Contact Lisa Jennings at firstname.lastname@example.org
Follow her on Twitter: @livetodineout
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