Muhsin Muhammad spent 14 years scoring touchdowns as a wide receiver for the NFL’s Carolina Panthers and Chicago Bears. Now he’s trying to score big deals as a private-equity investor.
Muhammad’s Axum Capital Partners has become a player in the restaurant investing world. On Monday, the firm made its second acquisition, of Nashville, Tenn.-based Back Yard Burgers. That followed its 2012 purchase of Wild Wing Café.
“Very similar to Wild Wing Café, Back Yard Burgers is known for the quality of food,” Muhammad said in an interview. “In this business, it starts with that — it starts with the quality of food. That’s number one.”
Muhammad (left) played in the NFL from 1996 through 2009. He mostly played for the Carolina Panthers, but he also spent three years with the Chicago Bears. In 2004, he played with the Panthers in the Super Bowl against the New England Patriots and caught an 85-yard touchdown pass, the longest in Super Bowl history.
Muhammad helped start Axum Capital Partners in 2010, shortly after his retirement from football, with a number of investing and banking veterans, such as Denis Ackah-Yensu, who had worked with former Bank of America CEO Hugh McColl’s investment firm McColl Partners.
The firm also includes industry experts, such as Edna Morris, a 30-year restaurant industry veteran who had served as president of several restaurant companies, including Red Lobster and Blue Coral Seafood & Spirits. The firm focuses on industries its members know, including education and restaurants.
“I’ve always had a strong interest in the restaurant business,” Muhammad said. “I love to eat; I love to cook. I’m interested in food in general. The relationships I had, it made sense to invest in the sector. It’s easy to wrap our hands around and understand it. And we wanted to invest in things that are necessities — things that don’t have the ebbs and flows and can withstand downturns in the economy.”
Fund investors include some football players and other athletes, but Muhammad said most are “just regular, high-net-worth guys” and people “looking to invest in great deals like this.”
The first acquisition, Wild Wing Café, has been performing well since it was acquired. The chain had 31 locations at the time of the purchase and has about 45 locations today, with some 30 in the pipeline, Muhammad said.
“It’s doing extremely well,” he said. “It’s exceeding our expectations in performance.”
The firm to hopes to do something similar with Back Yard Burgers, a chain that once had 180 locations, but has struggled since the recession with a shrinking unit base.
“That’s what we plan on doing: Invest in the brand, hone in on our strategy and messaging, and make sure every customer walks away with a great experience,” Muhammad said.
Although Back Yard Burgers is only the firm’s second restaurant deal, that doesn’t mean Axum has been inactive. The firm has found the environment for restaurant deals competitive.
Investors of all stripes have been pouring money into the restaurant industry in recent years, amid a dearth of consumer investment opportunities and a perception of relative safety in restaurants.
“We’ve looked at quite a few deals,” Muhammad said. “We were down the road with a few deals but didn’t get to the finish line.”
He said Axum’s strategy is to be a “patient firm,” and that it will select the “right deals.” The firm will then capitalize the company and focus on operations.
“When you’re dealing with a smaller fund, you’re not going into a situation where you have to outbid everybody,” Muhammad said. “You have to source your own deals.”
“We don’t get into bidding wars,” he added. “Good things don’t happen when you get into bidding wars.”
In Back Yard Burgers, Muhammad said he found a chain that could still make noise in the crowded better-burger space — not just for the food, but also for other elements, such as the 55-unit chain’s real estate.
He also liked the brand’s name.
“If you think about the name — Back Yard Burgers — there’s something that embodies the American spirit when you talk about celebrations, talk about family gatherings, sharing a meal,” he said. “There’s a lot of brand equity we can build upon. I think we can help with that strategy.”
So does David McDougall, who has been CEO of the chain since 2013, and who felt it was time to bring in another investor.
“They can bring in some resources we currently don’t have,” he said.
The resources could help the chain remodel restaurants and add technology, McDougall said, which is increasingly becoming a point of differentiation among restaurants.
“There’s no question the companies that have really been forward-thinking in technology are doing well,” he said. “Domino’s, Panera Bread, Starbucks — clearly they have been the trendsetters. We’re looking to be able to have some of the same things available to our guests.”
Contact Jonathan Maze at email@example.com
Follow him on Twitter: @jonathanmaze