Velvet Taco has received a “significant strategic growth investment” from private-equity firm L Catterton, the companies said Friday.
Dallas-based Front Burner Restaurants LP — which created the four-unit, premium taco concept — and Greenwich, Conn.-based L Catterton did not disclose terms of the investment deal.
Velvet Taco opened in Dallas, in 2011, and has restaurants in Chicago, Houston and Fort Worth, Texas. The company plans to open a unit in Austin, Texas, in the fall, executives said.
Jon Owsley, managing partner of L Catterton's Growth Fund, said in a statement that, “with a distinctly broad appeal that takes the taco past Tex-Mex, Velvet Taco has developed a cult-like following across the country and is poised for significant growth in the coming years.
“We see a tremendous opportunity to capitalize on Velvet Taco's innovative, food-forward approach to fast-casual dining and expand its presence in new and existing markets,” Owsley said.
Velvet Taco units produce high volumes — about $4 million in annual sales, executives said — in restaurants with relatively small footprints. The original unit opened in a converted Church’s Chicken restaurant with about 1,300 square feet and an outdoor patio.
Randy DeWitt, CEO of Front Burner, said: "L Catterton has unparalleled experience building great brands in the fast-casual restaurant space and a deep understanding of consumer trends. They have a keen instinct for what the consumer wants, and I'm confident that L Catterton will be an incredibly valuable partner as Velvet Taco continues to grow and attract more converts to the taco revolution.”
Front Burner has initiated a search for a CEO to oversee Velvet taco, a role that DeWitt has filled. The companies said DeWitt and the Front Burner team will continue to be involved in Velvet Taco’s development.
Velvet Taco’s bestseller is the No. 3, a crisp tikka chicken taco with spicy pepper sauce, buttered cilantro basmati rice, coriander yogurt and fresh basil, Front Burner executives said in a recent interview. The average check is $10 to $11.
Nation’s Restaurant News recently named Velvet Taco a 2016 Hot Concepts award winner.
Velvet Taco also sells “Back Door Chicken,” a $20 bundle of whole, rotisserie chicken with sides, which amplifies growing to-go sales at the front of the house.
L Catterton formed earlier this year through the partnership of Catterton, LVMH and Groupe Arnault, and invests in many consumer segments. Its restaurant investments include Bruxie, Chopt Creative Salad Co., Hopdoddy, Mendocino Farms, Noodles & Company, Outback Steakhouse, P.F. Chang’s China Bistro, Piada Italian Street Food, Protein Bar and Snap Kitchen,
In addition to Velvet Taco, Front Burner’s portfolio of brands includes Twin Peaks, Ida Claire, Mexican Sugar, The Ranch at Las Colinas, Whiskey Cake and the recently opened Sixty Vines.
Arlington Capital Advisors LLC acted as financial adviser to Velvet Taco.