Just six months after opening their first Crushed Red restaurant in 2012, in a St. Louis suburb, Chris LaRocca and Powell Kalish got a call just about any startup entrepreneur would want: From an investor, eager to write a check.
However, they turned it down.
“It was every restaurateur’s dream for somebody to come and offer to write you a big check,” LaRocca said. “We finished the meeting and we said, ‘This is tempting, but we’re not ready. This is probably not the right partner.’”
Four years later, they believe they have found the right partners in Dave Peacock, a former president of Anheuser-Busch, and Dean VandeKamp, a former partner at the consulting firm Ernst & Young.
Peacock and VandeKamp said this week that they made an equity investment in Crushed Red, a fast-casual salad and pizza chain, becoming partners with LaRocca and Kalish.
“We liked the guest feedback, both solicited and unsolicited,” VandeKamp said. “We hear great things about the concept, and the brand loyalty is amazingly high.”
Terms of the deal were not disclosed.
Peacock and VandeKamp, who teamed up in 2015 to create Vitaligent in order to purchase 77 franchised Jamba Juice units, bring complementary experience to six-unit Crushed Red, which will move into Vitaligent’s headquarters in Clayton, Mo.
The equity will help Crushed Red add more corporate units to fuel its expansion, which is already picking up steam.
“We’ve been very successful on our own, growing to three corporate and three franchised stores,” said Kalish, Crushed Red’s chief development officer. “But we knew we needed some capital and some strategic partners to grow this into a national brand.”
Crushed Red is opening six more locations early next year, and has deals for 20 to 30 franchised units in Oklahoma, Texas and Kansas.
“Fasten your seat belts, boys, this is going to be a fun ride,” said LaRocca, Crushed Red’s CEO.
LaRocca is a career restaurateur who worked for the El Torito chain before creating his own concepts. Kalish and his father, Ralph Kalish, who had been LaRocca’s attorney, turned to the restaurateur when they wanted to get in the business. Ralph Kalish died in 2014.
In 2012, Kalish and LaRocca opened Crushed Red in Clayton, Mo. The upscale, fast-casual salad concept serves salads, pizza, soups and appetizers, along with beer and wine.
For a fast-casual chain, Crushed Red does a surprisingly robust dinner business, with close to half of its business coming from the evening daypart.
Along the way, investors presented several opportunities for the chain to quickly ramp things up. Private-equity groups, venture-capital firms and other investors have been pouring money into upstart fast-casual chains. They provide entrepreneurs with fuel to grow, and often expertise from those who have been around the block.
LaRocca said Crushed Red “got pretty far down the road” with a group based in the U.K., but ultimately pulled the plug after deciding the two sides were not aligned.
Crushed Red decided to look for equity seven months ago in a bid to fuel growth. A mutual friend put LaRocca and Kalish in touch with Peacock, who, along with VandeKamp, had been looking for deals.
“From the very first meeting, we hit it off,” LaRocca said. “We’re very, very big on chemistry and culture. Dave and Dean’s way works hand in glove with ours. It couldn’t be any better.”
Peacock and VandeKamp also bring complementary experience. Peacock had been in marketing before making his way up to become president of Anheuser-Busch. VandeKamp is an expert in finance.
That meshes well with LaRocca, the restaurant operator, and Kalish, who only recently ended an eight-year career in commercial real estate to devote his full attention to Crushed Red as chief development officer.
“The intangibles they bring to the Crushed Red team is well beyond capital,” Kalish said. “All four of us complement each other perfectly.”
As for Peacock and VandeKamp, they knew the concept well long before they invested in it: Crushed Red’s first location is near their office. And they were frequent customers for months before making the investment.
“It’s a couple of blocks down from our office, so we’d grab lunch there,” VandeKamp said. “There’s nothing like experience, and making sure what you’re investing in is doing the right things.”
Update: Dec. 15, 2016 This story has been updated with information from an interview with VandeKamp and Peacock.
Contact Jonathan Maze at [email protected]
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