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Sun Capital Tries Bundling Concepts in New Concession Locations

Sun Capital Tries Bundling Concepts in New Concession Locations

In an effort to become more prominent in markets where they currently operate, five U.S. and Canadian restaurant chains—Bruegger’s Bagels, Fazoli’s Restaurants, Friendly’s Ice Cream, Smokey Bones Bar & Fire Grill and Timothy’s Coffees of the World Inc.—are teaming up to develop a joint concession concept that will bring the brands to airports, hospitals and other non-traditional retail venues.

The chains, all owned by Boca Raton, Fla.-based private investment firm Sun Capital Partners Inc., have agreed to participate in a joint strategic development program that will expand the concepts’ reach beyond traditional retail venues and into the concessions arena. The chains will be flexible in how the concepts are configured. It will look for opportunities to open stands that allow for one, two, three, four or all five concepts within a single location. The exact composition will depend on the availability of space and that particular market’s preference for certain brands. "They really complement each other and they can work well together,” says T. Scott King, senior managing director at Sun Capital.

The idea to move into concessions took form in 2008 when Bruegger’s began expanding to airports. The chain can now be found in Boston’s Logan Airport, Cincinnati/Northern Kentucky International Airport, Raleigh-Durham International Airport and Cleveland Hopkins. King says the concession locations have been performing well, with three out of the four locations near the top of the chain’s sales in each of those markets. “It’s very encouraging and it’s great not only for the sales side but for the brand awareness side,” he adds.

King says the time is now right to expand into more airports, universities and hospitals—areas that already clamor for the type of restaurants in the Sun Capital portfolio. With a number of airports around the country undergoing renovation work and with municipalities searching for revenue generators, King says the timing is perfect to introduce new restaurant brands to the concessions game.

For some of the brands, however, every market might not be the right fit. Ice cream and burger chain Friendly’s, for example, is well-known on the East Coast but not as heralded in the West. King says, for now, the company will put Friendly’s locations in airports and other concession areas where the brand already resonates with consumers. “We have lots of areas and lots of markets and certainly a lot of airports we can go to where Friendly’s has tremendous brand awareness,” King says.

The new bundled locations will be between 600 square feet and 1,000 square feet. Smokey Bones, however, will require a bigger footprint since it’s a bar concept. King estimates that concept needs about 2,000 square feet. He says the company is hoping to open about five new, mainly franchised concession locations in 2010.

The five concepts combined currently operate about 1,300 restaurants and outlets in 28 states.

–Lauren Shepherd

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