Tucson-founded Fox Restaurants gobbled up by Cheesecake Factory in $440M deal
A restaurant chain founded two decades ago in Tucson is being taken over by a national corporation in a $440 million deal, with Fox Restaurants such as North Italia, Culinary Dropout and Blanco being folded into the ownership of the Cheesecake Factory.
Fox was founded by Tucsonan Sam Fox in 1998, when he started up Wildflower American Cuisine, after first opening Gilligan's Bar & Grill.
Since, Fox — a graduate of Sabino High School who studied at the University of Arizona — has owned about 50 different restaurants in seven states, under more than a dozen different brands, and moved his corporate operations to Phoenix. Fox — who got his start working for his parents' restaurant, the Hungry Fox on East Broadway — has been a 10-time semifinalist for Restaurateur of the Year in the James Beard Awards.
The publicly traded Cheesecake Factory first bought part of Fox's operations in 2016, investing $88 million in the North Italia and Flower Child brands.
The latest deal, due to close this year, will have the privately held Arizona company taken over for a $308 million cash payment, including $130 million for the remaining stake in Flower Child and North Italia, along with about $45 million from profits over the next four years.
That brings the total package deal to more than $440 million.
Along with Wildflower other Fox restaurants covered by the deal include Zinburger, The Henry, Blanco Tacos & Tequila, and the Arrogant Butcher.
North Italia will be expanded nationally, and operated from the Cheesecake Factory's corporate headquarters in California, company representatives said. Fox's other restaurants will be run as a division in Phoenix, with Sam Fox remaining with the company.
"Since making our initial minority investments in North Italia and Flower Child in 2016, we have not only helped fuel the growth of both brands, but also developed a deep relationship with Sam Fox at Fox Restaurant Concepts," David Overton, Cheesecake Factory's CEO, said in a news release. "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."
"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 CEO said in Wednesday's release. "We look forward to continuing to work with Sam to expand the businesses."
Fox said, “This partnership will be the first of its kind for the restaurant industry. David Overton 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 runs 202 restaurants under its flagship brand, along with 17 others.