In an article published in
late January on Seeking Alpha, research analyst Chris Katje made note of
Chanticleer Holdings’ growth efforts in fast casual restaurants, international
expansion of the well-known Hooters brand, and other areas. Noting that the small-cap
holding company’s shares were up 48% in 2013, Mr. Katje predicted, “The company
should see strong results as it begins to monetize its international markets
and latest acquisitions.”
Acquisition of Spoon Bar
& Kitchen
Mr. Katje then turned to the
concrete details of Chanticleer’s most recent acquisition, Spoon Bar &
Kitchen from Texas-based CapRock Services. A single-location seafood restaurant
in Dallas, Texas, Spoon Bar & Kitchen is known for its upscale,
award-winning dining experience. Chanticleer Holdings announced its plans to
turn and expand the 58-seat restaurant into a fast casual concept. The
restaurant’s executive chef, John Tesar, was also noted to be remaining in
charge of the brand’s cuisine as well assisting in Chanticleer Holdings’
concept expansionary efforts, strengthening its chances for success.
It was also noted that
CapRock Services plans to do further deals with Chanticleer Holdings, as it
announced its active search for “growth concepts, with three to 10 units, to
help add to Chanticleer [Holdings’] growing portfolio.” Mr. Katje pointed to
success stories such as PF Chang’s development of Pei Wei as a well-known fast
casual concept as an indicator of his bullishness.
Hooters and Its Growth
Mr. Katje also highlighted
the growth of Chanticleer Holdings’ higher-scale international growth efforts,
namely in its expansion of the Hooters brand. In 2011, the holdings company had
acquired a small minority ownership of the company, and has since obtained
exclusive rights to open Hooters locations in South Africa, Hungary, England,
and parts of Brazil. The company also has a joint venture deal with Hooters in
Australia.
The article noted that as of
now, Chanticleer Holdings has 5 Hooters in South Africa, 1 location in
Australia (with 2 locations expected to be coming soon), 2 locations in Europe,
and 1 soon-to-be-opened location in Brazil (in time for the World Cup). Based
on its analysis, the company believes that it can support up to 75 Hooters
locations in its current international territories across the globe. It also
announced the acquisitions of two domestic Hooters locations in Oregon and
Washington as well, citing the northwestern United States’ appeal for growing
the Hooters brand as well as its other concepts.
Other Endeavors
Mr. Katje then mentioned the
company’s acquisition of Just Fresh, a fast casual healthy brand with five
locations, and American Roadside Burgers, a fast casual burger chain with five
locations. The company announced its plans to franchise both of these concepts
for greater regional market coverage. Chanticleer Holdings was also noted to
possess a small stake of ownership in Appalachian Mountain Brewery, a craft
brewer that could bring stronger shareholder value as the company puts the beer
in its restaurant holdings. Mr. Katje also made light of the company’s
investment in Beacher’s Madhouse, a recently opened Las Vegas MGM hotel
attraction. Chanticleer Holdings has exclusive rights for more Beacher
locations in the UK, South Africa, and Australia.
Mr. Katje concluded the
article by noting that Chanticleer Holdings’ diverse restaurant holdings, along
with its robust international market reach and potential for international
franchising of its own brands, could leave the doors open to pronounced
shareholder value in the future.
The Seeking Alpha article
can be found at: http://seekingalpha.com/article/1961801
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