Rutherford Seydel was an investor in Moe’s Southwest Grill before it was sold to Roark Capital’s Focus Brands in 2007.
Seydel, an Atlanta attorney and a minority investor in the Atlanta Hawks basketball team, was pleased with that outcome. So, he was eager to invest in the follow-up concept from Moe’s cofounder Matt Andrew: Uncle Maddio’s. Only Seydel wanted to see the fast-casual pizza chain reach a certain level first.
“I give him [Andrew] credit for some of the money I made with Moe’s,” Seydel, who is media mogul Ted Turner’s son-in-law, told Nation’s Restaurant News in an interview. “I waited until he had close to 50 locations. He has 44 now. He’s opened one or two a week, that’s his goal. He will get to 100, and that’s a real critical barrier to get through. Once you get that, I think the next 200 to 300 is a little easier.”
It will be easier for Uncle Maddio’s to reach those stages with the investment from Seydel, which was announced this week, as well as an earlier investment from S&S Group Inc.
The funds will enable Uncle Maddio’s to hire staff to support a growing number of franchisees that will take the chain to the nationwide level that Andrew wants. The company plans to triple its staff at its Atlanta headquarters to 30 people.
“We put some dollars in the bank to take us to the next level,” Andrew said. “We’ll mostly invest in human capital.”
The idea, he said, is to build out the support infrastructure in advance, before the company needs the employees to work with all of those operators. “One thing I learned with Moe’s was that we were always chasing our tail,” Andrew said. “The takeaway for me was we weren’t investing enough in the franchisor. As the founder of Uncle Maddio’s, my plan was to do the opposite of that.”
Seydel’s investment also brings something else: Seydel. He will have a seat on the Uncle Maddio’s board. And he can bring connections, particularly with bank financiers that could help franchisees get the funds they need to open new units.
“We work with a lot of banks,” Seydel said of his law firm. He noted that he recently spoke with one of the biggest Small Business Association lenders specifically about Uncle Maddio’s. “That’s something I can help bring to the table. That can help get franchisees ready to go. Get financing available, where I can help make some connection.”
Andrew said that Seydel’s investment also demonstrates that his chain has considerable potential.
“He has a lot on his plate,” Andrew said. “Rutherford gets thrown 25 new investment opportunities a day. He has to reject 99 percent of them. So this is a strong testament to the strength of our team. Most people invest in teams, not in brands.”
It’s also a testament to the category. Fast-casual pizza is a rapidly growing subsector in the restaurant industry, one that brings pizza to the lunchtime dayparts where it has traditionally been weak.
Andrew founded Uncle Maddio’s in 2009. The chain serves customizable, made-to-order New York style pizzas.
Seydel is a believer in the category, because it gives people choices and families don’t all have to eat the same pizza.
That’s important for his family because his daughters are gluten intolerant. “But they still love pizza,” he said. “Uncle Maddio’s can offer them something reasonable, a gluten-free option. It also has options for my wife and others, like organic vegetables. And it has four different sizes of pizzas. Not everybody can do that.”
All of Uncle Maddio’s 44 locations are franchised. The chain has big plans to add more, with 30 planned in 2016 and another 50 planned in 2017. The company aims to have 300 locations open within five years.
But Andrew noted that Moe’s grew to 400 locations in six years, so by comparison his current chain is growing more methodical. “It’s appropriate growth,” he said. “It’s appropriate for how we structured the organization internally.”