Roark Capital Group, the private-equity firm that is buying Buffalo Wild Wings, has invested in some of America's best-known brands across a swath of seemingly disjointed industries — restaurants, car washes, waste management, dental stores, pet shops, massage therapy and fitness centers.
But what Roark Capital Group knows best is franchising.
Launched in 2001, the Atlanta-based investment firm now has a stake in 21 food and restaurant chains, by far its largest sector. Its brands include such mainstays as Jimmy John's, Cinnabon, Carvel Ice Cream, Hardee's, Culver's and Arby's.
Under the proposed deal announced Tuesday, Buffalo Wild Wings would operate as an independent subsidiary of Arby's Restaurant Group, the second largest quick-service sandwich chain in the United States. Roark Capital purchased Arby's in 2011 and engineered one of the restaurant world's most-impressive turnarounds.
Roark has built its reputation by snapping up aging or struggling fast-food chains and bringing them new life.
It did so in 2010 when it took over Auntie Anne's, a purveyor of soft pretzels, as well as Arby's, whose redesigned restaurants and renewed focus on training and innovation have led to a surge in sales and expansion to more than 3,300 restaurants.
But Roark's interests have shifted in recent years to include trendy fast-casual eateries, such as Naf Naf Grill. It also has expanded its portfolio into full-service restaurants that haven't entirely lost their luster, such as Miller's Ale House and Jim 'N Nick's BBQ, which it bought this summer.
The Buffalo Wild Wings purchase fits this trend, said David Henkes, an analyst with Technomic, a Chicago-based restaurant and food service consulting firm.
"Until a few years ago, Buffalo Wild Wings was a brand that had been phenomenal," Henkes said. "Perhaps Roark looked at that and said, 'Perhaps with a little investments and some sprucing up we can turn it back around.' "
Officials at Roark and Arby's declined to comment.
Roark Capital Group since 2014 has been an investor in another Minnesota company, Hastings-based Anytime Fitness.
The firm's CEO, Chuck Runyan, described Roark as "a fantastic partner" that has helped Anytime Fitness analyze other business ventures as well as sharpen its own finances and improve efficiencies.
"They 'get' franchising," Runyan said. "They really invest in talent, they invest in systems. They understand that you need to make investments to grow the business. ... They're meticulous and methodical about making sure they're operated very well."
Roark tends to invest in companies and hold onto them longer than other private-equity firms, according to a recent investor spotlight by PitchBook.
It typically targets middle-market companies with experienced management teams and makes investments that range from $15 million to $1 billion.
Buffalo Wild Wings isn't Roark's first foray into the world of chicken wings.
The company was a majority investor in Wingstop, a Texas-based restaurant chain. It took Wingstop public in 2015 and then sold off its stake in late 2016.
Nearly every established restaurant is grappling with a shift in overall consumer dining preferences.
And few private-equity firms choose to invest in casual dining restaurants, such as Buffalo Wild Wings.
The acquisition is "a big jewel in their crown," Henkes said about Roark, adding that it reflects well on the Minnesota brand as well.
"It gives Buffalo Wild Wings a renewed lease on life," Henkes said. "They've been struggling for the past couple of years. What you're getting is private equity that's committed to investing in the business."
Roark Capital Group was named after Howard Roark, who was the protagonist in Russian-American writer and philosopher Ayn Rand's classic novel "The Fountainhead."
Roark, who was said to be partly inspired by American architect Frank Lloyd Wright, was committed to his own thinking and his own mind.
Jackie Crosby • 612-673-7335
