Buffalo Wild Wings Takes Majority Stake In Tex-Mex Chain

While the deal is nowhere near the potential Burger King Worldwide Inc (NYSE:BKW)/Tim Hortons Inc. (USA) (NYSE:THI) (TSE:THI) deal that sent Burger King shares soaring today, the deal is a significant move for Buffalo Wild Wings (NASDAQ:BWLD) as the chain looks to build on the successes of recent years and the doubling of its share price in 2013.

Buffalo Wild Wings Takes Majority Stake In Tex-Mex Chain

Launched in Dallas in 2010 by Rusty Fenton and Steve Dunn, Rusty Taco has since grown to nine locations: two company-owned restaurants and seven franchised locations in Dallas, Denver and Minneapolis/St. Paul. Unfortunately, the chain’s namesake wasn’t around for today’s announcement that did not disclose terms of the deal.

Rusty would be proud

Rusty Fenton succumbed to kidney cancer last year after a three-year battle with the disease.

In a press release today, Rusty Taco CEO Steve Dunn said, “Our co-founder, Rusty Fenton, always said, ‘Tacos are the most important meal of the day’ and we truly live that every day by providing our guests with the freshest ingredients and authentic tasting tacos at an affordable price.”

“We are delighted to be partnering with Buffalo Wild Wings and believe it can have an immediate impact in helping accelerate our growth,” Dunn added.

With the successes of Chipotle, you can hardly blame Buffalo Wild Wings for showing interest in the Mexican market. Research firm IBISWorld has forecast that the number of Mexican-style restaurants in the U.S. will be at around 47,000, from about 42,000 currently, in the next five years and clearly Buffalo Wild Wings (NASDAQ:BWLD) wants to be part of that growth.

“Rusty Taco’s fresh approach to tacos truly sets this concept apart,” Kathy Benning Buffalo Wild Wings’ executive vice president, said in a statement. “Buffalo Wild Wings’ investment is part of our strategy to partner with emerging restaurant concepts that have the potential for significant growth, can work throughout the country and have a highly engaged management team with a passion to grow the business.”

Buffalo Wild Wings’ Minority stake in PizzaRev

This is not the first time that Buffalo Wild Wings (NASDAQ:BWLD) has looked away from its beer and wings model and just last year took a minority stake in the California-based PizzaRev. The company provides an almost Subway like assembly line pizza model but with considerably better ingredients than the sandwich maker.

“As part of our long-term growth strategy, we are actively looking for additional concepts to invest in to build a portfolio of emerging brands, and continue to build a dynamic restaurant company,” said Benning with regards to both Rusty Taco and PizzaRev.

With the backing of BWW, PizzaRev opened its first locations outside of California in May of this year.

About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com