Hello!

This week we’re talking:

• The biggest restaurant IPO in history

• McDonald's first-ever stadium naming deal

• And why Dunkin' never clicked in India

Read on…

3 Numbers

25

Percentage of items sold at Black Rock Coffee Bar that are energy drinks. Black Rock — which announced 5.2% same-store sales growth in the first quarter of this year — joins 7Brew and Dutch Bros as coffee concepts that really sell a ton of energy drinks. (7Brew doesn’t report its energy drink sales, but 7 Energy is a core menu item; for Dutch Bros, energy drinks make up a reported 25% of its profits.)

$750 Million

Cost of the Chicago Fire’s new soccer stadium, which will be christened “McDonald’s Park” — the first time McDonald’s has ever struck a naming rights deal for an American pro sports stadium. The Golden Arches joins an exclusive list of restaurant chains that have named U.S. sports venues, including Smoothie King, Yum, and Little Caesars.

56

Current units for the bakery-cafe chain Maman, which announced a new fundraising round this week. Existing investor TriSpan USA reinvested; new investors include, interestingly, a “a large Ivy League endowment.” Maman — which grew sales more than 27% last year — plans to use the additional capital to continue its nationwide expansion.

The Big Story

Inspire Brands is setting the stage to go public. Via CNBC:

If it goes through later this year, this would be a seismic move — the first time the famously buy-and-hold Roark has taken any of its concepts public.

And what a first time. Because this is all but guaranteed as being the biggest IPO in restaurant industry history.

I put together a snapshot of public debuts over the past 20 years:

Inspire’s valuation would be 4x the second-largest chain on the list — Sweetgreen, which closed at $5.5 billion on its first day of trading.

The timing makes sense. Roark is looking to pay down debt from its Inspire acquisitions, including the $11 billion Dunkin’ purchase in 2020.

And the firm is not the only major player that sees something attractive in the public markets right now — Blackstone-backed Jersey Mike’s is also planning to go public this year and is seeking a $12 billion valuation.

If both Jersey Mike’s and Inspire price, the combined valuation would approach $32 billion … more than the entire restaurant IPO market of the last decade combined.

In the Headlines

• Activist investor Nelson Peltz is reportedly raising funds to take Wendy’s private. Peltz had expressed interest in a takeover bid in 2022. Today, he owns a sizable 16.24% of the company; his Trian Fund Management holds an additional 7.85% stake.

• In a social media post, Crumbl founders Jason McGowan and Sawyer Hemsley announced they’re stepping down from day-to-day management and bringing in “new leadership through an open search process.” McGowan and Hemsley — who will remain on the company’s board — grew Crumbl from 0 to +1000 locations in less than a decade.

• Some sales news from the upscale dining world: steakhouse concept STK posted a modest 1.4% same-store sales increase, but its restaurant-level margins jumped 280 basis points to 21%, thanks primarily to increased buying power from group buying with sister chain Benihana.

• Krispy Kreme’s turnaround is progressing — the chain reported an improved EBITDA as it continues to move to a more asset-light model, refranchising many of its stores and offloading its logistics to third-party providers.

• En route to a 5.8% systemwide sales increase last quarter, El Pollo Loco rode operational discipline and a banger of an LTO (the Baja Double Tostadas, which peaked at 8.3% of total sales mix).

• A franchisee-franchisor lawsuit with an eyewatering number: 111-unit Pizza Hut franchisee Chaac Pizza Northeast is suing Pizza Hut for $100 million in damages over its in-house AI program.

• Chinese food has been in the US longer than pizza and hamburgers. (By 40 years.) Good interview here with the founders of the Austin-based chain, Tso Chinese Takeout and Delivery, which is trying to pay homage to that lengthy heritage while modernizing the mom-and-pop Chinese restaurant.

• Every word that follows in this headline is unexpected: “Restaurant consumers are overextended, health-minded and nostalgic.”

• Why Dunkin’ never clicked in India — it chose locations designed for high visibility rather than daily consumption, and it confused a new consumer base by quickly pivoting to burgers and wraps. Pretty fascinating case study for any chains entering a new international market.

• Two things that feel like no-brainers to me: Whataburger will now be leaning more heavily into its iconic A-frame design when building stores outside of Texas, and Papa Johns is bottling its garlic sauce.

• Cantina Chicken x Mexican Pizza at Taco Bell.

Name That Chain!

You’ve got three guesses to name this week’s chain:

• Founded in 1964 in Decatur, Georgia, by a restaurant equipment supplier whose biggest client was a well-known competitor — he liked their business model so much he built his own version

• The name came from the founder's wife, who was watching a football game on TV

• Serves breakfast 24 hours a day and now has around 260 locations in 20 states, heavily concentrated in the Southeast

Find the answer at the bottom of the email…

Power Moves

Here are some notable C-suite moves from the past week:

• As it continues to try to find its footing, Jack in the Box hired former Taco Bell CEO Mark King as interim CEO, replacing Lance Tucker (who spent just 14 months on the job).

• F1 Arcade — the Formula One-themed concept with units in 6 major U.S. cities, plus Madrid — hired ex-Gordon Ramsey COO Mat Horvath as it revs up for expansion. (I’m sorry.)

What’s New at FS Supply

Welcome to the +100 new subscribers who joined us this week — glad you're here.

My day job is helping to run FS Supply, where we design, source, and manage branded packaging programs for multi-unit restaurant chains. We work with all major broadline distributors, and we handle everything from production to replenishment for custom-print bags, cups, containers, and more.

If packaging is still a recurring fire drill for your brand, we make it one less thing to worry about.

Thanks for reading! I’ll see you next week.

NAME THAT CHAIN ANSWER: Huddle House