Could The Habit Burger Grill come back to Or­lando?

New pow­er­house owner sees growth po­ten­tial

Orlando Sentinel - - BUSINESS - By Austin Fuller Con­tact the re­porter at [email protected]­lan­dosen­tinel.com or 407-420-5664; Twit­ter @afuller­re­porter

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

Yum! Brands, the par­ent com­pany of KFC, Pizza Hut and Taco Bell, is ac­quir­ing Habit Burger for about $375 mil­lion.

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