OMGEE!!! Say it isn’t so!! You know the economy is bad when the company’s like Portillo’s is considering selling. The owner of the famed fast food chain says business is good, he just needs a break. Well how about that?? The buyer of this gem will be on easy street as long as they don’t make any changes!! Man, I can taste the chopped salad & chocolate cake right now!!
Read the story as reported by the Chicago Tribune:
Portillo’s owner ready to slow down after 51 years selling hot dogs
Dick Portillo is ready to slow down a bit after 51 years in the hot dog business and thinks his namesake restaurant chain can continue to thrive in the right hands.
The Portillo Restaurant Group is looking for a potential buyer for the Portillo’s chain, which would give the private company a chance to cash in on its success as so-called fast casual restaurants increase in popularity.
It is the right time to look at options for the brand as “the hottest market for fast casual in the history of the restaurant business is right now,” President, CEO and Founder Dick Portillo said by phone Thursday.
“I’ve worked hard all these years and I think it’s time to take life easy a little bit, but at the same time, I would love to see the name carried on. And in order to do that you’d need a large influx of money,” said Portillo, 74.
The company announced Wednesday that it is exploring financial alternatives, including a possible sale of its fast casual division. That division includes all 38 Portillo’s restaurants, nine of which also house Barnelli’s Pasta Bowl locations. The Oak Brook-based company said it has hired Piper Jaffray & Co. as its financial adviser as it evaluates alternatives.
The Portillo Restaurant Group traces its start back to 1963, when Chicago-born Dick Portillo began selling hot dogs from “The Dog House,” a small trailer in Villa Park that didn’t have running water or a bathroom.
Today, The Portillo Restaurant Group calls itself the Midwest’s largest privately-held restaurant company. It has roughly 4,400 employees across four states: Illinois, Indiana, California and Arizona. Its 38 Portillo’s locations serve such fare as hot dogs and Italian beef sandwiches. In 2013, sales at the Portillo’s chain topped $300 million. Beyond Portillo’s, the company’s other brands include Honey-Jam Cafe and Luigi’s House.
Portillo’s has a loyal following. Last year, more than 500 people waited in line when a location opened in Scottsdale, Arizona, according to the company. The company has made deliveries to each of the 50 states.
Portillo’s stands out in the restaurant industry with sales of more than $8 million per location. To put that into perspective, average annual sales per location at Chipotle Mexican Grill and Panera Bread are roughly $2.3 million to $2.5 million.
“They are in a category all their own,” said Darren Tristano, executive vice president at Technomic, a food industry research and consultancy in Chicago. He said the average sales at a Portillo’s restaurant are roughly three times as high as sales at an Applebee’s restaurant.
Dick Portillo said he has no investors other than a landlord at one of the locations who “gets a small part of the action.” Otherwise, he is the sole owner of the company, he said.
Portillo said that he owns about 25 to 30 percent of the Portillo’s locations. He said that he owns about 60 percent of all of the property his businesses are on “free and clear, there’s no debt.”
After a small amount of expansion beyond the Chicago area, there is an opportunity for a brand like Portillo’s to really grow on a national basis, Tristano said.
“It’s going to take a lot of effort but there’s a big upside so evaluating a sale of the company, probably at this point, would be a good opportunity for management,” he said.
Portillo’s potential sale comes as investor interest in the so-called fast casual restaurant segment has taken off. Fast casual chains sell food at slightly higher prices than fast food chains and typically make food to order. Chicago-based Potbelly went public in 2013. Other chains, such as Noodles & Co. and Zoe’s Kitchen, are also now public. And Chipotle, which priced its 2006 IPO at $22 a share, now trades above $500 per share.
Portillo expects any sale would be to a private equity group, and said that he has not personally talked to any just yet.
“It’s possible it won’t happen,” Portillo said on Thursday. “If I don’t get what I want, if I don’t feel that the culture would be carried on, I don’t have to sell. Business is good.”
Source: Chicago Tribune