Dick’s Wings Owner to Acquire Fat Patty’s for $12.3M
ARC Group, which changed its name from American Restaurant Concepts in 2014, is dealing again. After announcing a complex plan to buy Tilted Kilt in June, the owner of Dick’s Wings & Grill said August 27 it has entered into an agreement to acquire the Fat Patty’s franchise. ARC Group will spend $12.3 million to purchase all of the assets of Fat Patty’s, a four-unit concept operating in West Virginia and Kentucky.
ARC Group said, according to unaudited financial information provided by Fat Patty’s, the franchise generated more than $11 million in revenue and $700,000 in net income during 2017.
"We are very excited to acquire Fat Patty's, a very successful franchise, which we believe will be a terrific addition to our portfolio of leading restaurant brands," said Seenu G. Kasturi, president and chief financial officer of ARC Group, in a statement. "Importantly, we believe that we can significantly expand the Fat Patty's franchise over time, while improving the profitability of its existing restaurants."
The brand, founded in 2007 beside the campus of Marshall University in Huntington, West Virginia, specializes in burgers, sandwiches, wings, appetizers, salads, wraps, and steak and chicken dinners in a family-friendly, casual-dining environment. Each unit has a full bar and several large, flat-screen TVs, the company said.
With the acquisition, Kasturi said ARC Group’s combined annualized revenue rate would be in excess of $15 million. With 47-unit Tilted Kilt added in, “we project ARC Group's combined annualized revenue run rate will approach nearly $30 million,” Kasturi said.
ARC Group reported about $4.4 million of revenue and $340,000 of net income last year. The company said it’s in the process of finalizing a financing plan that will enable it to complete the acquisition of Tilted Kilt “within the next few months.” Tilted Kilt, which has seen its unit count decline from about 80 stores to 51 last year, and had more than 60 in November before dropping to 47 in May, also saw its 2016 average-unit volumes decrease about 4 percent to $40,000 per week, compared with $43,000–$44,000 a couple of years earlier. The concept reported almost $14 million in 2017 revenue, ARC Group said.
In June, ARC Group said SDA Holdings, LLC, a company owned by ARC Group board member Fred W. Alexander, and the owners of Tilted Kilt fully executed all of the agreements for the sale to SDA Holdings. The plan included using funds loaned by Kasturi to satisfy payment obligations under the agreements to hold the franchise until ARC Group obtained suitable financing to acquire Tilted Kilt.
Dick’s Wings is a 23-year-old franchise with 15 restaurants in Florida and five in Georgia. It also has two concessions at TIAA Bank Field, home of the NFL's Jacksonville Jaguars, as well as a concession stand at Jacksonville Veterans Memorial Arena, home of the National Arena League's Jacksonville Sharks and the ECHL's Jacksonville Icemen.