Published on: March 2nd 2023
Written by: Beth Ewen
Article Source: Franchise Times
The Falcons Group entered a new brand, its fifth, by buying four Qdoba Mexican Eats restaurants owned by franchisee Randal Gast, and six corporate restaurants, all in the Minneapolis area.
Shamsu Charania, CEO of Atlanta-based franchisee Falcons, says he enters a new brand only through buying existing restaurants, and in this case is also negotiating a 15-unit development deal.
“Firstly, we were not into the Mexican segment, nor into the casual dining segment. And the casual dining segment as we all know is doing really well, and the brand is doing very well,” said Charania about Qdoba.
Qdoba and Falcons connected, the Gast deal came up and the franchisor added six corporate stores to the mix. “We also told them we need hard assets first. That’s how we always get into a brand, because when we have a base, and then we can expand from there,” he said. “Otherwise, it takes a lot out of you.”
Falcons has 55 Checkers and Rally’s; 29 Dunkin’ stores, some co-branded with Baskin-Robbins; 11 TGI Friday’s; and one Twin Peaks.
Last August, Butterfly Equity-backed Modern Restaurant Concepts, at the time with about 50 restaurants under the Modern Market and Lemonade brands, bought the much larger Qdoba from Apollo Global Management. Qdoba had 750 restaurants then.
Rob McColgan was named co-CEO of the group while Qdoba CEO Keith Guilbault was to continue as co-CEO of MRC.
In January, former Applebee’s leader John Cywinski was named Qdoba’s CEO. Guilbault said he was leaving to pursue other opportunities, and McColgan was named president of Modern Market and Lemonade.
Cywinski led Applebee’s for six years, implementing a significant turnaround effort while there. Cywinski also served as president of KFC for four years, was a franchisee of Dunkin’ and Sonic restaurants, and worked as chief marketing officer for Applebee’s in the early 2000s.
Charania said the changes in ownership and leadership did not concern him; rather, the appointment of Cywinski was a big plus. “They are serious about growth, and they are developing the brand, because they brought on a veteran in the industry, John Cywinski,” he said. “We had a meeting with him” and liked what he had to say. “As long as they keep the fiber of the brand the way it is, that has worked so well,” Charania’s on board.
The Qdoba deal closed late last year, and Falcons has already completed two more deals this year, for two Dunkin’ stores and the one Twin Peaks.
“We’re deal-dependent, not number-dependent,” he said, meaning he buys when opportunities come up, not based on a certain number of deals per year. “We are strongly funded. We’re well-capitalized and we have lending partners.”
Advanced Restaurant Sales represented the seller, Randal Gast of Qdoba Twin Cities Group, in this transaction.