The big financial change, however, flowed from the company’s blockbuster acquisitions in 2019, where it brought in North Italia and Fox Restaurant Concepts for $353 million. The Cheesecake Factory had already invested $88 million in FRC for a stake in North Italia and Flower Child and then proceeded to invest another $88 million ahead of the purchase.
In Q4, revenue contribution from North Italia and FRC, including same-store sales growth of 4 percent at the first, as well as roughly $90,000 in sales per operating rate at FRC, totaled $92 million. If you add in $19.3 million from external bakery sales, you get to the $694 million figure.
And this is only going to expand as The Cheesecake Factory turns up the growth dial in 2020. The company opened three namesake restaurants in 2019, a North Italia, and two Flower Child fast casuals (six Cheesecakes also opened internationally under licensing agreements).
This coming fiscal year, though, the company expects to accelerate to as many as 20 restaurants, CEO David Overton said. That includes six Cheesecakes, six North Italia locations, and eight restaurants within the FRC subsidiary, which now includes four Flower Child locations thanks to a calendar shift of one holdover opening. Four more international stores should support the company’s planned 8 percent total revenue growth objective for 2020.
Overton said the acquisitions reinforced “our leadership position in experiential dining.”
Gordon added the integration of North Italia specifically, which many point as the growth lever in the deal, has progressed smoothly. In fact, he said, the company saw manager and staff retention increase following close.
North Italia and FRC are expected to contribute about $425 million in revenue in 2020. North Italia is averaging roughly $126,000 in weekly sales.
In terms of growth, Clark said North Italia and FRC, while they could work in malls, “it won’t be a focus.”
“We'll definitely want to be in more of a variety of places, and that will kind of help us with the ebbs and flows of real estate over time,” he said.
Clark elaborated a bit on The Cheesecake Factory’s mall experience, too, and how that dynamic is changing amid a shifting retail dynamic. Many centers across the country are repurposing their footprint away from retail and toward restaurants and experience.