ARC Group, Inc., owner, operator, and franchisor of Dick’s Wings & Grill, said it intends to acquire Tilted Kilt, the Jacksonville-based company announced.
Dick’s Wings, a 23-year-old brand, has 15 restaurants in Florida and five in Georgia. There are three concession stands as well (two at TIAA Bank Field, the home of the Jacksonville Jaguars, and one at Jacksonville Veterans Memorial Arena). The move would significantly increase its operating footprint. Tilted Kilt has 47 units (45 are franchises) across the U.S. and Canada. The deal, which did not disclose terms, is a complex one, however.
SDA Holdings, LLC, a company owned by ARC Group board member Fred W. Alexander, and the owners of Tilted Kilt have fully executed all of the agreements for the sale to SDA Holdings, the company said in a release. It is using funds loaned by Seenu G. Kasturi, ARC Group’s chairman and chief financial officer, to satisfy payment obligations under the agreements to hold the franchise until ARC Group has obtained suitable financing to acquire Tilted Kilt. ARC Group said it intends to enter into an agreement with SDA Holdings “within the next couple of weeks” to buy Tilted Kilt from SDA Holdings. ARC Group’s CEO since 2013 is Richard Akam, who once led Hooters of America in the same role and clocked time with First Watch, Raving Brands, and Twin Peaks.
In other terms: SDA Holdings plans to buy and then hold Tilted Kilt until ARC Group can purchase it.
“I am very excited that we have a plan in place to add Tilted Kilt to ARC Group’s book of premium brands,” Kasturi said in a statement. “I am ARC Group’s biggest fan and have always supported the company, both financially and otherwise, whenever helpful or needed. By structuring the transaction in this manner, SDA Holdings will be able to acquire Tilted Kilt now and hold it until ARC Group has the funds available to finance the acquisition of the franchise from SDA Holdings.”
“We are in the process of finalizing a financing plan for ARC Group that will enable it to obtain the funds necessary to complete the acquisition of Tilted Kilt,” he added. “We expect ARC Group to complete the acquisition of Tilted Kilt within the next few months.”
Titled Kilt’s unit count has been on the decline. The brand went from about 80 stores to 51 last year, and had more than 60 in November when the chain unveiled a new catering program, off-premises program, and menu for the coming year. In May, Tilted Kilt said it was making burgers the star of its latest menu change. By that time the store count had fallen to 47.
In 2016, average-unit volumes dropped about 4 percent to $40,000 per week, compared with $43,000–$44,000 a couple of years earlier.
Founded in the Las Vegas Rio Hotel and Casino in 2003, Tilted Kilt debuted a new store prototype on the southwest corner of Warner Road and Priest Drive in Tempe, Arizona, in August 2016. The following year it defined two fresh models, including a smaller 4,800-square-foot unit. Read more about the changes here.