The sports bar not only opened new stores with $3.5 million AUVs, but it's also finding success in the M&A market.
Geo Concepcion likes to choose challenges. Ones that are "really, really, difficult," he said earlier this year at the ICR Conference.
That's where the industry veteran found himself in 2019 when he became CEO of The Greene Turtle, a Mid-Atlantic sports bar with four-plus decades of history.
"When I joined in ‘19, we were having some top-line and bottom-line challenges as a lot of casual-dining restaurants were," he said. "And so having come from Famous Dave’s prior, the focus was, how do we reinvigorate this brand? How do we give it life again? Take this legacy brand, and give it a new path forward?"
From 2019 to 2023, the chain lost 13 restaurants, most of which happened during COVID. The chain took those volatile times as an opportunity to pause and channel energy into determining what The Greene Turtle is going to be and how that would impact the next two to three years.
The process touches multiple areas. At the store level, Concepcion recognizes new prototypes are key to the sports bar's future. As the brand builds an energized footprint, digital and to-go have moved to the forefront. So has sports betting. In February, The Greene Turtle announced two upcoming units in Canton and Towson, Maryland, will house sportsbooks to leverage a soaring multi-billion-dollar industry. The restaurants will feature state-of-the-art audio and visual technology, like tickers to keep bettors informed.
Systemwide, commodities, supply chain, and inflation have been problematic, but in recent times, Concepcion has been "completely hands-on" in how the brand thinks about pricing, leases, and contract negotiations. And if there's been one positive to COVID, it's been more flexibility with landlords.
"We were happy to find that in that post-COVID environment, landlords were really focused on, how good of an operator are you?" Concepcion said. " … It really came down to, can you operate well and can you be a tenant for the long term? So we were beneficiaries of that in a big way."
A third piece—and arguably the most important—is labor, and that's inside restaurants and at the corporate level. Concepcion knows that to keep talent, the brand needs momentum. Moves that let employees see the bigger picture and upward trajectory. One way is successful organic growth. At the start of 2023, The Greene Turtle had 34 locations, 19 of which were company-owned. The brand had an AUV of $2.5 million and 18 percent unit-level EBITDA margins. Last year, the brand built four restaurants, which are posting $3.5 million in AUV and competitive cash-on-cash returns. Five stores are planned for 2023.
The Greene Turtle has created buzz through the M&A market, as well. In June 2022, the company announced it acquired Clark Crew BBQ, an independent casual-dining concept in Oklahoma City. The restaurant, which has won more than 700 Top 10 awards, was founded in 2019 through a collaboration between Travis Clark and Famous Dave's parent BBQ Holdings. The single-unit store generates $8 million in annual volume and $1.2 million in unit-level contribution.
Concepcion, who developed a relationship with Clark while he worked at Famous Dave's, calls him the "Tom Brady of barbecue."
"At the time, I would be the first to say I wasn't exactly excited about that idea because we had a bunch of barbecue concepts that we were in the middle of fixing at the time," Concepcion said. "But that was before I actually got to spend some time with Travis Clark and understand what the true talent he was and what the possibilities of what he could do were."
Once The Greene Turtle "solved a lot of the legacy issues that were there," Concepcion said, Clark felt comfortable scaling the concept. As of January, the restaurant was in lease negotiations for its second location. The brand feels confident it can become a 10-unit chain.
"So in my mind, in the same way that David Anderson and Famous Dave's became the household name and the business became a very profitable business, we have the same opportunity here with Clark Crew BBQ, and we will be very focused on delivering on that," Concepcion said.
The Greene Turtle's other big move came from several conversations on how a small, emerging company can thread the needle of IT, finance, operations, and so many other departments. At one to six units, getting institutional capital isn't necessarily an option, Concepcion said. The sports bar saw a need to support founders who are talented and may have solid unit economics but could benefit from a holistic suite of services.
So The Greene Turtle formed Founders Growth Platform. As part of this deal, the chain partners with a founder and agrees to build a single unit out of pocket. Cash flow is split evenly, and The Greene Turtle has the right to participate in 50 percent of any future growth, at a minimum. There are also some drag-along rights to grow the concept and complete a transaction if the brand chooses to.
There are seven fast-casual brands under the Founders Growth Platform, four of which opened in 2022. Five are scheduled to debut in 2023. Here's how the financials look: $1.3 million AUV, 21 percent unit-level EBITDA margins, with targets of 15 percent cash-on-cash returns and two-year paybacks.
"By taking things off the plate of the founder—that either that's not their core competency or not what they want to do—we allow them to run even faster," Concepcion said.
The Greene Turtle, Clark Crew BBQ, and Founders Growth Platform now fall under parent company, ITA Holdings. In five years, the combined entity is projected to have 155 locations, including 73 for The Greene Turtle, 10 for Clark Crew BBQ, and 72 under Founders Growth Platform.
It's another challenge, but Concepcion isn't fazed by it. In fact, he believes ITA Holdings is capable of even more.
"We're very confident that given what we've seen in all of the new vintage and the performance that within five years, 155 units is probably conservative, but that's certainly what we're tracking to," the CEO said.