Carrols completes acquisition of 220 Burger King, Popeyes restaurants

SYRACUSE, N.Y. — Carrols Restaurant Group, Inc. (NASDAQ: TAST) on Tuesday completed the acquisition of 165 Burger King and 55 Popeyes restaurants from Memphis, Tennessee–based Cambridge Franchise Holdings, LLC.

Those eateries are located in 10 Southern and Southeastern states.

Carrols now operates 1,010 Burger King and 55 Popeyes restaurants in 23 states, following the acquisition, the company said in a news release. Syracuse–based Carrols is the largest franchisee of Toronto, Ontario–based Restaurant Brands International, Inc. (NYSE: QSR), the franchisor of Burger King, Popeyes, and Tim Hortons.

“This transaction is an exciting growth catalyst for Carrols,” Dan Accordino, chairman and CEO of Carrols Restaurant Group, said. “We believe it strengthens our position in the Burger King system by providing us the opportunity to continue executing our acquisition and expansion strategy, and adds Popeyes, a growing brand that further enhances our expansion alternatives. We also believe that we have the potential to improve the performance of the Cambridge restaurants and to leverage their footprint and development team as we launch the next phase of growth for the benefit of Carrols’ shareholders.”

In conjunction with the merger, Alex Sloane and Matt Perelman, co-founders of Cambridge, have joined the Carrols board of directors.

Restaurant development, acquisitions

As previously announced, Carrols has also entered into an area development and remodeling agreement with Burger King Corporation (BKC). It pre-approves the company for continued growth through both acquisitions and new restaurant development.

Under the terms of the agreement, Carrols’ right of first refusal (ROFR) assigned to it by BKC has been expanded to allow for the acquisition of 500 additional Burger King restaurants. Carrols has also assumed Cambridge’s existing Popeyes development agreement and its ROFR for Popeyes restaurant acquisitions in Tennessee and Kentucky. As part of these agreements, Carrols has agreed to develop 200 new Burger King and 70 Popeyes restaurants over the next six years.

The company will also remodel or upgrade a number of its Burger King restaurants (or restaurants to be acquired) to the “Burger King of Tomorrow” image over the same period.

Carrols believes these development agreements provide it with a “significant expansion runway” for both brands, per its release.

Contact Reinhardt at ereinhardt@cnybj.com