The Cheesecake Factory Incorporated announced today it has entered into a nearly $400 Million deal to purchase Arizona-based Fox Restaurant Concepts, which operates multiple restaurants in the San Diego area, including two locations of North Italia, Blanco's Tacos & Tequila in Mission Valley, Flower Child in Del Mar, and an incoming outpost of The Henry all-day restaurant in Coronado.
"Since making our initial minority investments in North Italia and Flower Child in 2016, we have not only helped fuel the growth of both brands, but also developed a deep relationship with Sam Fox at Fox Restaurant Concepts," said David Overton, Chairman and Chief Executive Officer of The Cheesecake Factory Incorporated. "We realized the true potential of this relationship as we worked through the integration process for our planned acquisition of North Italia. It became evident that the combination of two of the most experiential and entrepreneurial restaurant companies could drive greater value as one organization."
The Cheesecake Factory's purchase of Fox Restaurant Concepts - which currently operates 45 restaurants across 7 states and Washington D.C. - will be completed this fall for $308 million in cash at closing. An additional $45 million will be due based on profitability over the next four years. The Cheesecake Factory company previously invested $88 million in the North Italia and Flower Child concepts over the last three years in anticipation of their purchase. The Fox Restaurant Concepts transaction also includes an earn-out provision based on the financial performance of the company's brands outside of North Italia and Flower Child.
"This partnership will be the first of its kind for the restaurant industry," said Sam Fox, Founder and Chief Executive Officer of Fox Restaurant Concepts. "David Overton and I quickly realized the magic occurring between our organizations while we worked through North Italia’s integration. With our aligned cultures and philosophies, The Cheesecake Factory is the right partner to embrace our creative spirit, enabling us to innovate concepts, while providing the infrastructure and capital to scale."
Following the completion of the transactions, North Italia’s operations will be located at The Cheesecake Factory Incorporated’s corporate headquarters in Calabasas Hills, California to help scale the concept for national expansion. Fox Restaurant Concepts will operate as a wholly-owned subsidiary, and continue to be led by Sam Fox from his headquarters in Phoenix, Arizona.
Sam Fox has owned more than 100 restaurants since dropping out of the University of Arizona when he was 20 years-old. The founder of Fox Restaurant Concepts, Fox is an eleven-time James Beard Award nominee for Restaurateur of the Year, and a New York Times best-selling cookbook author. He was also recently named one of the 50 most influential people in the restaurant industry by Nation’s Restaurant News for the second consecutive year, is the 2014 recipient of the Richard Melman Innovator of the Year Award by Restaurant Hospitality magazine, and the 2015 recipient of University of Arizona Executive of the Year by Eller College of Management. Since launching in 1998, Sam Fox’s Fox Restaurant Concepts has evolved to over a dozen different concepts. Fox owns a home in Coronado and splits his time between San Diego and Arizona.
Fox opened his first San Diego-based restaurant, True Food Kitchen at Fashion Valley Mall, in summer 2012, before selling the concept in 2017 to an investor group that includes Oprah Winfrey as a member. Fox Restaurant Concepts also opened Flower Child in Del Mar in late 2016, Blanco Tacos + Tequila in Fashion Valley Mall in mid-2018, and North Italia in Fashion Valley Mall last fall. A second location of North Italia opened this past June in the new One Paseo complex in Del Mar. Fox Restaurant Concepts is also in the process of opening The Henry all day restaurant and bar within the Coronado space that previously housed Costa Azul for two decades.
For more information about Fox Restaurant Concepts, visit foxrc.com.
