CapitalSpring’s Support Brings Major Profile Boost and Franchise Growth to Beef ‘O’ Brady’s Family Sports Pubs

Beef ‘O’ Brady’s Family Sports Pubs needed a partner who could help them re-boot the Brand when it decided to start working with CapitalSpring in June of 2017.

Founded in 2005, CapitalSpring is a restaurant-focused investment firm. The company invests in franchise businesses that operate within national or regional franchise systems, franchisors and corporate-owned restaurant chains. Beef ‘O’ Brady’s, a sports pub chain founded in 1985 in Brandon, Florida, has more than 150 locations throughout the U.S., but its growth in recent years had stagnated.

Recently growth prospects for Beef ‘O’ Brady’s have changed. The relationship between Beef ‘O’ Brady’s and CapitalSpring has produced immediate positive results, with both working “arm-in-arm” to help the pub chain unlock the Brand’s potential, said CapitalSpring Managing Director and Head of Restaurant Investment Group Erik Herrmann.

“Beef ‘O’ Brady’s was previously owned by another investment firm before it was sold in June of 2017, almost two years ago,” Herrmann said. “We were one of many firms that saw the opportunity and the relationship with management grew out of that process.”

Management increased its ownership as part of CapitalSpring’s investment, which Herrmann noted is a preferred blueprint for the firm. “It’s been a great partnership,” Herrmann said. “One of the key assets we saw in the business was the strength of the team. Our approach generally is to provide a strategic perspective. We’re very careful not to micromanage or to get in the way of the team. Instead, we’ve largely focused on setting the right priorities for the business and thinking through challenges and opportunities together. It’s been more about figuring out how we grow the company.”

Chris Elliott, the CEO of FSC Franchise Co., which owns Beef ‘O’ Brady’s, noted the high value that CapitalSpring brings to the table.  

“CapitalSpring invests only in restaurants, so they have a very deep understanding of the restaurant business,” Elliott said. “They see a lot of different restaurant successes and failures. Because of this, they have great benchmarking data and can spot opportunities for cost improvement or topline growth. They have great financial and analytical tools, as well as a keen sense of branding and effective marketing.”

When asked what has changed about Beef ‘O’ Brady’s since CapitalSpring came into the picture, Herrmann noted an upside in terms of renewed growth for the casual dining concept.

“The casual dining landscape has had its challenges, but Beef ‘O’ Brady’s has been a notable outlier,” Herrmann said. “In fact, 2018 was one of the best sales year in the company’s history.”

This, Herrmann said, speaks to the Beef ‘O’ Brady’s concept being impressively differentiated thanks to its value platform. It’s not just the price of the food, but the quality of food and the experience. Herrmann notes how the Beef ‘O’ Brady’s franchise model tends to skew towards single and smaller multi-unit businesses, and how the brand’s franchisees are more entrenched in their local communities.

“There is a different type of community connection here,” Herrmann said. “That’s the DNA of the brand, which makes it unique and more defensible in an otherwise tough segment.”

Ever since CapitalSpring came on board, both CapitalSpring and Beef ‘O’ Brady’s have noted a renewed interest in the Beef ‘O’ Brady’s brand, both from new franchisees coming into the system as well as with existing operators, Herrmann said.

“New capital and a renewed mission for the concept have generated excitement for the brand’s growth and energized the franchise system,” Herrmann said. “The brand continues to see strong momentum into 2019.”

The positive relationship between CapitalSpring and Beef ‘O’ Brady’s bodes well for the future.

“In the end, our business is really about the people,” Herrmann said. “In this case, we’ve got a very proven team and a shared vision for where we’re taking the business. We’ve worked hard over the last year and a half to figure out how we can be supportive of management’s efforts and we’ve developed a rhythm of how we’ve worked together. In these partnerships, it’s about knowing how you can contribute. We know what each party brings to the table and we fully align on where we’re going.”

Elliott praised the CapitalSpring team for being such great partners and fostering such positive relationships with management. He gives his full endorsement to CapitalSpring for brands that are thinking of partnering with them.

“I would highly recommend them, primarily for the value-added resources they bring and the partnership  they foster between ownership and management,” Elliott said. “The communication is excellent. It’s a real give-and-take relationship. They develop a lot of trust in their management teams; they assist where needed and provide resources where needed, but they let the management team run the companie, which is unique in private equity.”