PHOENIX — The Cheesecake Factory announced Wednesday that it had "entered into definitive agreements" to purchase Sam Fox's Fox Restaurant Concepts, the Phoenix-based restaurant group behind several popular Valley restaurants including North Italia, Zinburger, Blanco Tacos & Tequila, and Flower Child.
"This partnership will be the first of its kind for the restaurant industry," said Fox in a statement . "David Overton (Chief Executive Officer of The Cheesecake Factory Incorporated) and I quickly realized the magic occurring between our organizations while we worked through North Italia’s integration. With our aligned cultures and philosophies, The Cheesecake Factory is the right partner to embrace our creative spirit, enabling us to innovate concepts, while providing the infrastructure and capital to scale.”
The Cheesecake Factory has previously invested in the North Italia and Flower Child brands. (Fox also started Sauce and True Food Kitchen, two restaurant concepts that were sold to other companies.)
“We realized the true potential of this relationship as we worked through the integration process for our planned acquisition of North Italia. It became evident that the combination of two of the most experiential and entrepreneurial restaurant companies could drive greater value as one organization," Overton said in his release.
"In turn, we have decided to bring together North Italia and Fox Restaurant Concepts, including Flower Child, with The Cheesecake Factory to reinforce our leadership position in experiential dining," Overton said. "With the power of The Cheesecake Factory brand, infrastructure and growth potential, complemented by an additional growth vehicle in the North Italia concept and an incubation engine to develop concepts of the future, we believe we will be even better positioned to provide our guests with exceptional dining experiences, offer growth opportunities for our respective teams and maximize long-term value for our shareholders."
The deal is expected to close near the third quarter. It will be worth $308 million cash at closing, plus an additional $45 million over the next four years, the release said.
Under the announced agreement, Cheesecake will own 100% of Fox Restaurant Concepts and its brands. However, Sam Fox will remain in charge of Fox Restaurant Concepts, and the company will remain headquartered in Phoenix.
North Italia's operations, however, will move to Cheesecake's headquarters in Calabasas, California, the release said.
Not part of the agreement are the 18 Zinburger restaurants located outside of Arizona -- Florida, Georgia, New York, Virginia -- because those rights were sold to another development company, a spokesperson for The Cheesecake Factory Incorporated told ABC15.
In a phone interview with ABC15 late Wednesday, Fox said the deal "means we have an exciting future ahead of us. You know, we obviously have an incredible partner with The Cheesecake Factory, and we're excited about the growth and the opportunity of building a brand all around the country with, whether its North [Italia], or Flower Child, or The Henry, or Blanco, or any of the exciting brands that we have."
He also said customers in Phoenix and Tucson should not notice any big changes to the restaurants in our market.
"It's going to be business as usual," he said. "We're excited to continue to run the same great restaurants that we have here in Phoenix."
He also hinted that there could be some announcements soon about growth in the East Valley.
"We're going to continue to grow some of the brands around the Valley. I think there are some announcements coming out pretty soon about some growth down in Gilbert and some other places. So, it's just going to be more of the same. I don't think you'll notice a whole lot of difference."
David Gordon, president and chief executive officer for The Cheesecake Factory, said the unique deal focuses on the potential for growth for both companies and that, at least for Cheesecake, the primary focus right now is on the North Italia brand.
"Right now we're squarely focused on the growth of North Italia and, again, giving Sam [Fox] the opportunity to continue to do what he does best -- and that is create new concepts, build on the concepts that are there already," he said.
"It's a great opportunity for growth and for both of us, both companies to really showcase what great 'restauranteuring' is about as we grow across the country," he added.