News: Square 1 Restaurants, a 41-unit Dairy Queen Franchisee, Has Been Acquired by Elite Restaurant Group
August 18, 2020
Square 1 Restaurants CEO Bill Spae told the Monitor his company has sold their 41 Dairy Queen restaurants to Los- Angeles-based multi-concept operator The Elite Restaurant Group. Square 1’s owner was Eagle Merchant Partners, a PE fund that late last fall sold Chicken Salad Chick to the private-equity firm Brentwood Associates. Susan Miller and Sean Mirzabegian from Morgan Kingston Advisors brokered the Square 1/Elite transaction. Square 1 was beating comps during the time of the sale, said Miller, “and that drummed up a lot of investor interest” as well as having a sophisticated management team that could provide the financials quickly so they could get the transaction turned around in a couple of weeks. Plus, there were a lot of stakeholders in the deal, she said, so working proactively with the franchisor to provide transparency was key to a quick closing. Elite has been known for buying distressed brands and trying to turn them around. It previously acquired Daphne’s and Slaters 50/50. Square 1 was formerly known as Vasari, Dairy Queen’s second largest franchisee with 70 DQ restaurants in Texas, New Mexico and Oklahoma. The decline in the oil business in 2017 caused Vasari to file bankruptcy. The company shed underperforming locations, and now, with increased drive-thru usage and the sale of family-pack meals, sales are running ahead of a year ago.