Honeygrow, a four-unit fast-casual chain, closed Wednesday on a $25 million financing deal with existing investors that will allow the healthful stir-fry and salad chain to accelerate expansion.
Philadelphia-based Honeygrow said the investment was led by Miller Investment Management and Brook Lenfest, together representing a majority stake.
Both parties first invested $5 million in the brand last year. Miller Investment managing partner H. Scott Miller and Lenfest are existing Honeygrow board members.
For the latest investment, $5 million represented the sale of interests by early investors, said Honeygrow president and co-founder David Robkin.
Honeygrow was founded in 2012 by Justin Rosenberg, who is now CEO, as a premium fast-causal brand.
The concept is known for its use of local and seasonal produce and house-made sauces and dressings. The menu is built around a platform of stir fries, salads and smoothies. A “honeybar” lets customers build a sweet treat with various fruits, toppings and house-made whipped cream. Customers order by touch-screen kiosk to build their meals.
In a statement, Rosenberg said the group had been approached by premier private-equity firms and investors, but “it was critical for Honeygrow to partner with a group that could focus on what makes us successful: our unique start-up nature and culture, love for the entrepreneurial spirit, and passion for product and brand, rather than just the fast-casual space because of its current popularity.
“Miller Investment genuinely understands the mindset of a founder and entrepreneur, which is critical for the Honeygrow team and myself,” he added. “We’re proud and excited to be a Philadelphia startup that only three years ago was nothing more than a business plan and a pipe dream.”
Conshohocken, Pa.-based Miller Investment also holds a stake in the Five Guys Burgers and Fries chain, the company said.
“Honeygrow is an exceptional concept with a strong brand,” Miller said in a statement. “We were immediately impressed with the unique combination of stir fries, salads and honeybar, all crafted with fresh, high-quality ingredients. Its loyal following is a testament to its appeal and immense potential.”
In addition to growth, the influx of capital will allow the concept to invest further in technology, as well as develop its management team, said Robkin, who is also a partner in Philadelphia-based multi-concept operator Starr Restaurants.
Honeygrow plans to open four more locations in 2015. Next year, it aims to open another 10 restaurants, expanding throughout Pennsylvania, New Jersey and Delaware.
In 2017, Honeygrow will begin to move west. The company does not have plans to franchise, Robkin said.
Honeygrow units average more than $2 million in sales, with an average check between $10 and $11. Its ideal footprint is about 2,000 square feet to 2,200 square feet.
The law firm Wachtell, Lipton, Rosen & Katz advised Miller Investment. Pepper Hamilton LLP advised Honeygrow.