Focus Brands, a national food conglomerate, believes that the future of fast food is in mergers and acquisitions – and they want to be a forerunner in the trend.
As the parent company of Moe's Southwestern Grill, Jamba Juice, Cinnabon, Auntie Anne's, Schlotzky's, McAlister's, and Carvel, Focus is aiming to consolidate the food and beverage market. To help with this mission, it has the backing of Roark Capital, the firm that guides Inspire Brands (owner of Sonic and Arby's), and CKE Restaurants, the umbrella company for Carl's Jr. and Hardee's. Focus sold 561 franchises in 2021 and opened an additional 175 stores in the United States and Canada over the past year. Chief Executive Officer Jim Holthouser sees a future in which the brand would own anywhere from 150 to 900 stores.
Holthouser believes that the food and beverage market will be dominated by only a few major players in the next ten years. This trend has accelerated of late, as evidenced in the past year by Restaurant Brands International purchasing Firehouse Subs for $1 billion, FAT Brands making four acquisitions valued at almost $900 million, and Jack in the Box purchasing Del Taco for $575 million.
"Consolidation is not going to go away," Holthouser told QSR Magazine. "It's just going to accelerate because how do you afford the tools we're talking about or the world-class supply chains or anything else that you need to compete?"
To keep up with other prominent brands, Holthouser believes companies must make acquisitions a priority. He believes that a company's power lies in the scale of its portfolio. Taking a brand without scale, plugging it into a value engine, and consolidating it all into one database is a formula for success. With the systemwide implementation by Focus of a new digital program for onboarding and order taking, he says the company is looking to pivot into the digital platform space as well.