Hargett Hunter targets $100 mln in debut restaurant fund

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Hargett Hunter, restaurants, private equity, mergers, M&A
Photo sourced from the ChopShop website.
  • Founder Jeff Brock was a partner at Morehead Capital
  • Jason Morgan worked as CFO at Zoes Kitchen
  • Has made two investments so far

A specialized group of private equity firms target the restaurant industry, and now a new firm is joining the ranks.

Hargett Hunter Capital Partners, formed in 2015, is in the market with its debut fund targeting $100 million, sources with knowledge of the process told Buyouts.

The firm, based in Raleigh and Dallas, has commitments from a publicly traded restaurant company and a family office. Hargett Hunter is moving into a more formal phase of fundraising, sources said.

Hargett Hunter sees a dearth of capital in the lower end of the middle market for restaurant chains. The firm targets both emerging restaurants with, say, five to 15 units, and more established chains ready to move into the next phase of growth, according to Chief Operating Officer Brian Fauver.

Managing Partner Jeff Brock, formerly a partner at Morehead Capital, formed Hargett Hunter in 2015. Other executives at Hargett Hunter include Operating Partner Jason Morgan, who formerly worked as chief financial officer of Zoes Kitchen, Fauver and analyst Trey Stilley.

The firm is a marriage of skills between “Jeff … with a lot of direct investing experience, and Jason, with a very big operating perspective,” Fauver said in a recent interview. “We’re bringing those two things together to create value.”

Sourcing money from an anchor backer, Hargett Hunter so far has made two investments. In July 2016, the firm said it acquired a majority stake in Original ChopShop Co, a fast-casual restaurant with four locations in greater Phoenix serving fresh and organic bowls, salads, sandwiches and juice.

Then, in October 2016, the firm said it acquired a majority stake in Ruggles Green, a Texas-based fast-casual restaurant serving entrees, sandwiches, pizza, burgers, salads and pasta that use local ingredients, including vegetarian, vegan and gluten-free alternatives.

Other PE investors in the restaurant space include Roark Capital, which is in market targeting $5 billion for its fifth fund, Leonard Green & Partners and Goode Partners, TSG Consumer, Argonne Capital and L Catterton.

Action Item: Reach Jeff Brock here: jbrock@hargetthunter.com

Photo sourced from the ChopShop website