Savory Fund invests in Zao Asian Grill to scale pan-Asian concept
Savory Fund partners with Zao Asian Grill to accelerate expansion and enhance market presence.
auto_awesome
Savory Fund has invested in Zao Asian Grill, a pan-Asian fast-casual brand with 23 locations, to scale its operations. The investment aims to leverage Zao’s recent 18.2% same-store sales growth and plans to open over 10 new locations by 2027. Zao's founders emphasize the importance of maintaining the brand's unique appeal while expanding its presence in new territories.
Why It Matters
This partnership may enhance Zao's territory reach and operational capacity, potentially influencing its unit economics positively. Additionally, the planned expansion could affect competition in the fast-casual segment.
Savory Fund has entered into a partnership with Zao Asian Grill, a fast-casual pan-Asian restaurant concept founded in 2013 by veteran restaurateur Dave Duffin. The terms of the deal, including the transaction value, have not been disclosed. Zao currently operates 23 locations primarily in the Mountain West region and has recently marked an impressive 18.2% increase in same-store sales, attributed to a focus on clean eating, a growing catering service, and successful limited-time offers.
Zao is led by CEO Tom Hartman, who boasts extensive multi-unit operations experience, and Paul Killpack, a former CFO of Café Zupas. This strategic investment aims to fuel Zao's expansion, with plans to open over 10 new locations through 2027, supported by a $12.5 million debt facility from Columbia Bank.
Andrew K. Smith, Managing Director of Savory Fund, expressed excitement about the collaboration, stating, "Getting to finally roll up our sleeves and build something together... is the kind of partnership you don't pass up.” Duffin also highlighted the alignment of vision and ambition with Savory, emphasizing their understanding of the brand's unique qualities and their experience in scaling operations.
The implications of this deal for existing franchisees may include strengthened support and operational resources from Savory Fund, which could lead to streamlined processes and enhanced growth potential. However, as with any strategic merger, franchisees may also be concerned about any changes to the royalty structure or operational guidelines that could accompany the new partnership.
The food service industry continues to adapt to changing consumer preferences, and with a clear pathway for growth in place, Zao stands to leverage Savory’s expertise to capitalize on market demand. The focus on maintaining brand integrity while pursuing aggressive expansion suggests a careful balance of growth strategies moving forward. Stakeholders will want to monitor Zao's development closely, particularly how the integration of Savory Fund’s resources may impact operational practices and franchisee relationships in the coming years.
More in Food & Beverage
Bonchon agrees to acquisition by two entities
Bonchon to be acquired by Minor Food and Serruya Private Equity to fuel growth in Americas.
Jack in the Box, Red Robin and Bonchon
Bonchon to be acquired as Jack in the Box struggles with sales performance amidst changing consumer trends.
How Chili’s Plans to Remain ‘America’s Hottest Restaurant Brand’
Chili's demonstrates sustained growth with strong sales performance amid challenging conditions.