Today’s dealmakers are drawn to 7 types of restaurants.
Better-for-you eats
Consumers are more focused than ever on the impact of food on their own health, as well as on the health of the environment, and they are flocking to restaurants that provide ingredients considered fresh, “natural” and often local. “People want real food, sourced locally and then cooked from scratch by real chefs,” says Larsen, who invested in Harvest Seasonal Grill & Wine Bar in 2016. “Harvest delivers that product in a professionally-managed, comfortable setting at prices that are conducive to repeat visits.”
Following in Chipotle’s footsteps
In an effort to enhance the customer’s experience, some restaurants are setting up models similar to the one pioneered by Chipotle Mexican Grill in which diners select the ingredients that go on their plates. Venture capital firm Cleveland Avenue LLC acquired PizzaRev in 2017.
Ethnic and regional
Americans come from all over the world, and they want food that reflects their diversity. Buyers are going after restaurants that feature food that is inspired by a specific region. In 2017, Indian fast-casual brand Curry Up Now acquired rival Tava Kitchen.
Bar hopping
Establishments that can provide an exciting and entertaining environment are attracting investors since diners are no longer interested in just sitting in a booth. Larsen MacColl backed Burger & Beer Joint in 2016 which describes itself as a “full-service concept in an energetic, fun atmosphere.”
Dining out at home
There’s a booming business in meals prepared for people at home, as busy consumers look to save time. Amazon's $13.7 billion Whole Foods purchase is expected to be a game changer.
Quick service, a.k.a. fast food
Fast food restaurants, which the industry refers to as “quick service,” continue to attract busy consumers. In a closely watched deal, Oak Hill Capital Partners purchased Checkers Drive-In for $525 million in 2017.
Fast casual and casual dining
“Fast casual” restaurants offer a hybrid of fast food and casual dining by enabling diners to order for themselves at a counter while also providing tables for those who want to stay and eat. In 2016, Roark invested in Jimmy John’s Sandwiches.