Home » Famous Dave’s Parent Actively Seeking Another Acquisition

Famous Dave’s Parent Actively Seeking Another Acquisition

The acquisitions were part of a busy 2020 for BBQ Holdings, which invested heavily in ghost kitchens and dual-branded restaurants.

The company opened seven Famous Dave’s ghost kitchens inside Granite City locations. The ghost kitchens are generating an average of $7,000 per store per week. When volume warrants, restaurants are investing in separate to-go areas to streamline operations. Two more will be added in 2021.

In terms of dual concepts, BBQ Holdings entered a 25-unit development agreement with Bluestone Hospitality Group to open Famous Dave’s ghost kitchens and dual restaurant concepts with Italian chain Johnny Carino’s. Additionally, Famous Dave’s and Texas T-Bone Steakhouse opened a dual-branded store in Colorado Springs, and there are plans to open a dual-branded Famous Dave’s and Cowboy Jack’s steakhouse in Woodbury, Minnesota. BBQ Holdings also noted the most productive Famous Dave’s ghost kitchens inside Granite City stores will evolve into dual concepts.

The motivation behind dual concepts is that Famous Dave’s 6,500-square-foot boxes are designed to execute higher AUVs than the current $2.7 million. BBQ Holdings estimated that when Famous Dave’s teams up with another brand, it could bring in $1 million to $1.3 million in additional revenue with 25 percent flow through, and $250,000 to $325,000 in additional EBITDA per location.

BBQ Holdings is also exploring a dual/virtual concept partnership with a “known pizza brand that has simplistic operations with low upfront capital investment.” The company said a potential deal could produce $800,000 in additional revenue with 25 percent flow through and $200,000 in additional EBITDA per location.

The company has the same mindset for Granite City. Similar to Famous Dave’s, Granite City’s kitchens were meant for roughly $6 million in AUV, as opposed to the current $3.8 million to $3.9 million. To resolve this, BBQ Holdings is investigating a dual-branded restaurant with a high-end breakfast concept that also sells alcohol.

The breakfast restaurant would be open from 6 a.m. to 2 p.m. while Granite City would open from 2 p.m. to 11 p.m. The goal would be to open 10 of these restaurants. BBQ Holdings estimated such a deal could generate $1.5 million in additional revenue with 25 percent flow through and $375,000 in additional EBITDA per location.

BBQ Holdings same-store sales sank 15.3 percent in 2020, including a 17 percent decline at the 98 franchised locations and a 8.5 percent slip at the 47 company-owned units. Off-premises sales mixed 61.9 percent in 2020 at corporate Famous Dave’s restaurants, or a 72.6 percent increase year-over-year. Dine-in sales mixed 30.9 percent, or a 46.3 percent decrease, and catering mixed 7.2 percent, or a 54.6 percent plummet.

Famous Dave’s 27 corporate locations are projected to generate between $72.5 million and $74.5 million in revenue in 2021, and the 98 franchised locations are on pace to earn roughly $200 million this year.