Dive Brief:
- Sun Holdings has acquired substantially all of Uncle Julio’s assets through affiliate Next Restaurants, the company said in a press release. The purchase was made through a foreclosure auction on Dec. 19. Terms of the bid were not disclosed
- The acquisition comes over six months after Sun Holdings reportedly bought Uncle Julio’s debt at a discount on the secondary market.
- Sun Holdings said the buyout is part of a strategy to grow its market share in the Mexican dining segment. Last year, the multi-brand franchisee also acquired Freebirds World Burritos. In 2019, it acquired Taco Bueno.
Dive Insight:
Sun Holdings now has a diverse portfolio of Mexican brands spanning QSR, fast casual and casual dining concepts. Uncle Julio’s was previously owned by L Catterton, which acquired the chain in 2017. The chain grew relatively slowly since that deal. In 2017, Uncle Julio’s had 29 restaurants and ended 2023 with roughly 37, according to Restaurant Business. Uncle Julio’s, which also operates a virtual brand called Savage Burrito, has high average unit volumes of over $6 million, Restaurant Business reported.
“This acquisition reflects our ongoing commitment to identifying opportunities where we can combine operational excellence with strategic growth to deliver value to customers and stakeholders alike,” a Sun Holdings spokesperson said in the press release.
The company said its “extensive resources, operational excellence, and industry-leading capabilities will position Uncle Julio’s for long-term success.” The casual chain will benefit from a shared supply chain, in addition to Sun Holdings’ marketing power and ability to scale operations.
Sun Holdings, which is also a Burger King franchisee, has a portfolio of over 1,800 locations across the U.S. that include multiple foodservice and retail brands. It has built up much of its portfolio in the last five years through acquisitions, including the purchase of Applebee’s and IHOP locations in 2021 and 2020, respectively. In 2022, the company entered into a major refranchising agreement with Papa Johns
The restaurant M&A environment has started to heat up in recent months, with Jersey Mike’s selling a majority stake to Blackstone in November. Craveworthy bulked up its multi-brand platform through the buyout of emerging pizza chain Fresh Brothers that same month. Earlier this year, private equity firm Maple Park Capital Partners bought a majority stake in Rita’s Italian Ice.
