The Friendly Acquisition of Mooyah Burgers


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A pair of friendly capital partners are taking the reins from another pair of close friends, preparing Mooyah Burgers, Fries & Shakes for its next phase.

Gala Capital and Balmoral Funds acquired the 100-location better-burger concept from the original founders, naming COO Michael Mabry president in the new hierarchy. Mabry said it was the logical next step and one that would allow his longtime friend, co-founder and compulsive entrepreneur Rich Hicks to exit the business and focus on what he does best: building.

“A good way to describe this is a management-lead buyout partnering,” said Mabry, who noted that Hicks is already onto the next thing. “He’s got already three other concepts he’s working on, so he’s got plenty to do.”

Mabry said talks began just months ago and it became clear that Mooyah could benefit from a new capital stack and perhaps some added vision. And after a chance conference meeting, he and Anand Gala started discussing what that might look like. As the conversation progressed, Gala brought the deal to longtime friend Jonathan Victor, the founder of Balmoral Funds.

“Jonathan is a 20-year friend of mine and we had always talked about doing something together,” said Gala, a former Applebee’s juggernaut, Del Taco operator and founder of Gala Capital. “But it wasn’t until I exited the Applebee’s business that I could pause and reflect and start talking about it in real terms.”

The industry-agnostic fund generally has investments in industry and logistics, not the restaurant industry. But like any smart private equity firm, it understands the power of having a seasoned company veteran in Mabry and an industry heavyweight in Gala.

“The team has been fantastic to work with, they really believe in people, they understand you can invest the money but then you need someone to run it,” said Gala.

As with all capital infusions, the goal was to enhance the brand. But some good news in this era of restaurant oversupply, all that dry powder isn’t going to new units.

“The driving factors were how do we better support our franchisees, how do we help them build topline sales and how do we continue to compete in the better-burger fast-casual segment,” said Gala. “The first thing you look at is people and infrastructure, are there any improvements to make or additions to make, then the second is from a technology standpoint: Looking at analytics partners to better understand our real estate model, CRM to better understand our customer. With the investment and with the new board and some equity infusion in the company, the idea is to improve all of those pieces.”

Mooyah has been a scrappy competitor in the better-burger segment, a segment that has been both growing and questioned for 10 years. With the announcement of a new burger concept, there’s more talk of the segment slowing down. According to the most recent FDD, Mooyah AUVs come in at about $800,000, with the top 10% seeing $1.5 million AUVs. The investment for a new location runs from $375,000 to $623,000.

Mabry said unit growth will come naturally once those core metrics are further enhanced.

“The easiest way to double our system is to have each of our franchisees build another location,” said Mabry.

The terms of the deal were not disclosed, but Gala said he’s never done anything less than 10 years, and he doesn’t see that changing. Balmoral may have a shorter timeline as a traditional private equity partner.

Gala said he represents a growing group of industry veterans who have enjoyed success and have a mind for grander things, demonstrated in deals like this by him and other industry heavyweights.

“There are a variety of us, and I think you’ll see that become more common for people who want to affect the success of businesses, who want to reinvent or reinvigorate the business,” said Gala. “A lot of it I think is a function of time, experience and success. I think what you’ve seen is people like Aziz [Hashim] and Aslam [Khan], myself and others, who have achieved levels of success and still have the passion to do these things.”

One just has to look at Arby’s or Popeyes' performance as late for evidence of what that operational insight can do.

“It really does align for performance substantially better than the norm,” said Gala. “We are students of the industry and we are taking what we think is right and what has been proven to move the needle.”

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