How Much Did Chicken Salad Chick Sell For? A Look at the Fast Growing Restaurant Chain’s Private Equity Deals

Chicken Salad Chick, the fast casual Southern restaurant chain known for its creative chicken salads, has been gaining a lot of attention recently for its rapid growth and attractive financial performance. Founded in 2008 in Auburn, Alabama, the company has grown to over 200 locations across the Southern United States in just over a decade. Much of this growth has been fueled by investments from private equity firms looking to capitalize on the brand’s success. In this article, we’ll take a closer look at Chicken Salad Chick’s journey with private equity and examine how much the company sold for in two major transactions.

Humble Beginnings and Early Growth

Chicken Salad Chick was started in 2008 by Kevin Brown and Stacy Brown. The couple opened the first location in Auburn, Alabama after discovering a unique recipe for chicken salad from Kevin’s aunt. The fresh, made-from-scratch chicken salads quickly developed a devoted following, allowing the company to open its second location just a year later in 2009.

Over the next few years, the brand steadily grew organically and through franchising. By 2015, Chicken Salad Chick had 63 locations open across the Southeastern United States. Though still small by chain restaurant standards, the brand was starting to appear on the radar of private equity firms looking to invest in emerging restaurant concepts. With impressive average unit volumes of $1.1 million and a proven model for growth Chicken Salad Chick seemed poised for rapid expansion with the right partner and capital.

First Private Equity Investment with Eagle Merchant Partners

In May 2015, Chicken Salad Chick announced it had received its first institutional investment from private equity firm Eagle Merchant Partners. Though the terms of the 2015 deal were not disclosed, Eagle Merchant Partners acquired a majority stake in the business to help accelerate Chicken Salad Chick’s growth

Eagle Merchant Partners is a private equity firm that focuses on investing in businesses that deal with customers. Its plan is to go after small, growing brands that are just starting out and could use some institutional capital and expert advice. When Eagle Merchant Partners put money into Chicken Salad Chick in 2015, it fit this description well.

In the four years that Eagle Merchant Partners owned Chicken Salad Chick, it quickly grew its business. The brand had more than $45 million in system-wide sales by the end of 2016 and had opened more than 40 new stores. During the time that Eagle Merchant Partners invested, the company grew from having 63 stores to having over 130. Sales at the same store grew by an average of 10% per year, which meant that revenues also went up by a lot.

Brentwood Associates Acquires Majority Stake in 2019

Chicken Salad Chick announced its second big private equity deal in November 2019. Eagle Merchant Partners sold a majority stake in the company to Los Angeles-based Brentwood Associates for an undisclosed amount of money.

Brentwood Associates is another private equity firm focused primarily on investments in consumer brands. With over $2 billion in capital under management, Brentwood Associates targets growing restaurant concepts, retailers, and consumer product companies. Its current restaurant investments include Lazy Dog Restaurant & Bar, Veggie Grill, and Blaze Pizza.

Analysts say that Brentwood Associates probably paid between $200 and $300 million to buy Chicken Salad Chick. Details of the 2019 deal were not made public, but Chicken Salad Chick had grown a lot while it was owned by Eagle Merchant Partners. At the time of the deal, the company had over 130 locations and $200 million in sales across the whole system, so the price probably reflected a high sales multiple.

Growth Continues Under New Ownership

Since the acquisition by Brentwood Associates, Chicken Salad Chick has continued its rapid expansion. In the three years following the Brentwood transaction, Chicken Salad Chick has opened nearly 70 more locations to surpass 200 total restaurants.

Same store sales growth has also remained robust at an average of 10% per year. And in 2021, systemwide sales topped $250 million as more consumers discovered the brand. Chicken Salad Chick’s impressive performance has validated Brentwood Associates’ investment thesis so far.

Going forward, Chicken Salad Chick is aiming to open 250 more locations over the next five years. With a proven model, ample room for growth primarily in the Southeast, and financial backing from Brentwood Associates, the brand seems poised for continued success.

Key Takeaways

Chicken Salad Chick’s meteoric growth from small regional chain to national brand has been fueled by two key private equity investments:

• Eagle Merchant Partners’ investment in 2015 helped expand footprint from 63 to 130 locations in 4 years.

• Brentwood Associates acquired the company in 2019 for around $200 to $300 million valuation.

• With Brentwood’s support, the company has added nearly 70 more restaurants and topped $250 million in sales.

• Chicken Salad Chick plans to open 250 more locations over next 5 years as it continues benefiting from private equity involvement.

Chicken Salad Chick’s successful private equity partnerships illustrate how the right investor backing can rapidly accelerate growth for emerging restaurant concepts. Both Eagle Merchant Partners and Brentwood Associates provided the necessary capital and expertise to expand the brand, while allowing the company’s proven model and product to shine. As Chicken Salad Chick continues its growth trajectory, its private equity story will likely serve as an attractive model for other rising restaurant chains considering institutional investment.