CHICAGO Stir Crazy Fresh Asian Grill, the 14-unit Asian casual-dining chain, and Flat Top Grill, the 14-unit Asian fast-casual chain, will merge Friday under a new parent, Flat Out Crazy LLC, which will be a $60 million-plus restaurant company.
Terms of the deal between Stir Crazy’s parent, the Cincinnati-based private-equity firm the Walnut Group, and Flat Top’s parent, Oak Park, Ill.-based Happy Valley Corp., were not disclosed. Both chains will remain separate and individual growth vehicles under one management team at the Chicago-based headquarters of Stir Crazy.
Frederic H. Mayerson, chairman and chief executive of the Walnut Group, and founder of ChiChi’s Mexican restaurants, will serve as chairman and chief executive of Flat Out Crazy. Greg Carey will serve as president and chief operating officer of the company, responsible for both brands.
“The economy is tough, and these are two great concepts trying to stay ahead of the curve,” Carey said. “It’s easier to be together. We’ll be a $60 million-plus restaurant company, and at that volume we’ll gain flexibility. It just makes sense.”
Carey, who spent five years at P.F. Chang’s China Bistro Inc. starting in 1998 and later was an early developer of the Pei Wei Asian Diner concept and then chief operating officer of The Buckhead Life Restaurant Group, said the Asian full-service and fast-casual segments are underserved and ripe for growth. Flat Out Crazy expects to expand both Stir Crazy and Flat Top Grill to a national level, aiming to hit 105 aggregate locations within five years. Two Stir Crazy restaurants are set to open this fall, one in Tampa, Fla., and the other in Overland Park, Kan.
The Asian segment, whether full-service or quick-service, stir-fry based or more entrée driven, has been an attractive growth prospect for many larger restaurant companies. Ruby Tuesday Inc. purchased one Wok Hay Asian Diner location in 2007 and has since opened another location. The Cheesecake Factory opened its Rock Sugar Pan Asian Kitchen in 2008. Others have stumbled, as P.F. Chang’s China Bistro has slowed growth of its Pei Wei concept and Carlson Restaurants shuttered various locations of its Pick up Stix chain.
“Asian concepts have the flavor profiles that today’s consumers are looking for,” said Darren Tristano of market research firm Technomic. “It continues to be a growth segment. American consumers like the customization [of a stir fry], the flavors and the healthier options.”
Carey said Flat Out Crazy would be able to take advantage of the glut of real estate sites available today, especially as the restaurant company holds two complementary brands serving different dining-out occasions. For restaurant companies that have the financing, real estate availabilities have never been better, as many restaurants have been forced to close in the face of weak consumer spending, and many landlords are looking for tenants able to ride out the recession.
“This is the lowest low I’ve ever seen,” Carey said, referring to the economy and its effect on the restaurant industry. “But the upside is if you have the wherewithal, it is an extraordinary time to grow. We are primed and ready to go.”
Both Stir Crazy and Flat Top Grill are corporate-operated chains with no franchising plans. The full-service Stir Crazy’s average unit volume is about $3.6 million, while fast-casual Flat Top Grill’s average unit volume totals between $1.5 million and $1.8 million.