Cracker Barrel is dipping deeper into the fast-casual industry. The casual leader announced Friday it’s agreed to acquire 33-unit Maple Street Biscuit Company in an all-cash transaction for $36 million.
Founded 2012 in Jacksonville, Florida, by Scott Moore and Gus Evans, the emerging brand has 28 corporate and five franchised units. The stores report targeted average-unit volumes of $1 million and store-level EBITDA of 17 percent of net sales.
Notably, Cracker Barrel said it will convert its Holler & Dash Biscuit House units into Maple Street Biscuit Company locations in the coming months. Moore will remain CEO of Maple Street Biscuit Company and report directly to Cracker Barrel CEO and president Sandy Cochran.
“The breakfast and lunch-focused fast casual category is an attractive segment, and our experience with Holler & Dash has reinforced this belief,” Cochran said in a statement. “We have long admired Maple Street Biscuit Company with its emphasis on made-from-scratch food and hospitality. It is a proven brand with attractive unit economics and strong growth potential, and it is positioned to become a leader in this category.”
“The acquisition accelerates our penetration in this segment and provides growth for delivering shareholder value. I look forward to working with Scott and his team as we further grow this brand together,” Cochran added.
Maple Street is known for selling biscuit dishes at flat-dollar prices and is not open on Sundays. It uses premium ingredients such as fried goat cheese, sausage and shiitake mushroom gravies, and makes jams and jellies in-house, as well as biscuits. Fresh-squeezed orange juice and mimosas are available at select stores.
The brand also features salads, bowls, waffles, artisan coffee, and other Southern-focused items, like fried green tomatoes and collard greens.
“From the beginning, Maple Street Biscuit Company has focused on serving its communities through comfort food with a modern twist and gracious service,” Moore said in a statement. “Our brands share many similarities such as scratch cooking and an emphasis on hospitality. I’m excited about this opportunity, and I believe Cracker Barrel will help us grow our brand and further achieve our mission of helping people, serving others, and being a part of the community.”
Cracker Barrel debuted Holler & Dash in 2016. There are seven locations—two in Alabama, one in Florida, two in Tennessee, and lone units in North Carolina and Georgia.
This past March, activist investor Sardar Biglari urged Cracker Barrel to divest or eliminate the fast casual, saying it would reduce general and administrative expenses. Cracker Barrel has not released financial results for the fast casual in past quarterly reports.
In Q4 of fiscal 2019 Cochran said, “We continue to work on the Holler & Dash business model, and we believe there is great opportunity in the breakfast and lunch focused fast casual segment.” That was the only mention of the concept.
Cracker Barrel has been busy recently. The company purchased about 59 percent of eatertainment chain Punch Bowl Social’s economic interest and roughly 49.7 percent of its voting interests in July. The surprising move cost Cracker Barrel $89 million for an initial non-controlling stake, with the company agreeing to provide upward of $140 million.
Broken down, the chain forked up the $89 million in fiscal 2019, which left $51 million for growth capital—of which Cracker Barrel provided $15 million or so already. Another $36 million remains. The stake Cracker Barrel acquired was previously held by private equity giant L Catterton, which has investments in Noodles & Company, Anthony’s Coal Fired Pizza, and many others. It’s also the firm that recently agreed to buy Del Frisco’s for $650 million.
Cracker Barrel’s deal with Punch Bowl Social also left the option open to buy the brand outright.
The 667-unit chain’s same-store sales lifted 3.8 percent, year-over-year, in Q4 comprised of 0.2 percent traffic growth and average check of 3.6 percent.