Could The Habit Burger Grill come back to Orlando?
New powerhouse owner sees growth potential
The Habit Burger Grill closed all three of its Central Florida restaurants last year, but the burger chain is being acquired by a company interested in its growth potential.
Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, has entered an agreement to acquire Habit Burger for about $375 million, the company announced Monday.
“As a fast-casual concept with strong unit economics, The Habit Burger Grill is a fantastic addition to the Yum! family and has significant untapped growth potential in the U.S. and internationally,” Yum! Brands CEO David Gibbs said in a news release.
Habit Burger closed its Orlando and Winter Park restaurants in August because of poor performance, CEO Russ Bendel said in a statement at the time.
The deal is expected to be completed by the end of the second quarter. It needs the OK from Habit Burger stockholders as well as regulatory approval.
A statement from a spokeswoman for Habit Burger said it was too early to talk about long-term plans.
“There will be no immediate changes in terms of our Orlando presence,” the statement said.
Louisville-based Yum! Brands opens more than eight new restaurants per day on average and has more than 49,000 restaurants.
A report from analyst Peter Saleh, of BTIG, said it expects the company to leverage its “scale, systems and partnerships” to “support expanded unit growth and provide its franchisees another opportunity in a category (burgers) they don’t compete in.”
But a report from Stifel analyst Chris O’Cull said most U.S. consumers are unfamiliar with Habit Burger as about 70% of its restaurants are in California.
“On the one hand, we believe it makes sense for YUM to acquire restaurant chains that can benefit from its purchasing scale, technology investments, marketing expertise, and its global franchise network to support expansion,” the report states. “However, we are not confident in The Habit’s growth prospects.”
Habit Burger opened its first restaurant in Santa Barbara in 1969 and has more than 270 restaurants in 13 states and seven international locations. Habit Burger still has restaurants in South Florida.
Its menu includes “charburgers,” billed as being cooked over an open flame.
The burger chain is slated to remain based in Irvine, Calif., and Bendel will continue to manage the brand.
Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, is acquiring Habit Burger for about $375 million.