The Genghis Grill acquisition by Craveworthy is expected to close soon, but other deals are on deck./Photo courtesy of Mongolian Concepts.
It’s going to be a busy year of acquisitions if Gregg Majewski has his way.
The founder of the new franchise platform company Craveworthy is in the process of acquiring Mongolian Concepts, the parent of Genghis Grill, BD’s Mongolian Grill and Flat Top Grill, a company he already led as CEO. That deal is scheduled to close in a few weeks.
Now Majewski said there are a number of deals in the works that will bring even more growing and potentially franchise-able brands into the Craveworthy platform—but, of course, there’s the matter of funding.
Majewski is looking to raise as much as $25 million for the growth he has planned. And, in an unusual move, he has put out a call for investors on the company’s website, offering Class A units at $2 per share in a private placement, with a minimum investment of $5,000.
While the creation of Craveworthy earlier this year involved a minority-stake investment from reinsurance and asset management holding company FG Financial Group Inc., Majewski said so far most of the capital raised is his own.
He described the $25 million goal as “lofty,” saying $10 million to $15 million might be more realistic. But on the website, the company says it has ambitious plans to achieve systemwide sales of more than $1 billion within the next five years.
“We offer no claim of clairvoyance as to what systemwide sales will be five years from now,” the website says. “But if we want to achieve such goals we need to start planning today, so we are.”
Craveworthy’s investor presentation starts with a disclaimer: “An investment in our securities involves a high degree of risk,” which is outlined in more detail in the private placement memorandum. The offering’s risk factors say that it needs “substantial” additional investment to meet those lofty goals. There is no financial information in the document, given the company’s limited offering history.
But Majewski contends that his company is designed to make that risk easier to stomach because of the multi-concept strategy.
“You may have come in because you know we’re doing deal X, but you get A through Z, so your risk is diluted,” he said.
So far under the Craveworthy umbrella are four emerging brands—two acquired and two created in-house.
Those acquired include Wing It On, a 14-unit franchise concept created by Matt Ensero, who is now part of Craveworthy as brand president. There’s also the four-unit Budlong Hot Chicken in Chicago, which recently launched franchising.
Developed in-house was Krafted, a casual-dining concept that Majewski plans to start franchising later this year or next, depending on other acquisitions that could come in sooner and change the timeline.
Lucky Cate Poke Company is primarily a virtual brand that will be operated out of existing restaurants and ghost kitchens.
It hasn’t been announced yet, but Majewski said he has also completed a deal to acquire Sigri Indian BBQ out of Newark, N.J., a two-unit fast-casual brand with a menu that features kebabs and kathi rolls, along with build-your-own plates of dishes like chicken tikka and malai chicken. It’s a concept Majewski helped create, he said.
Once the Mongolian Concepts deal closes, Genghis Grill will join the franchise-brand lineup. As CEO, Majewski has already done a lot of work on that brand, debuting a new smaller prototype last year and reigniting franchising. After not selling a franchise since 2011, Genghis Grill sold 24 franchise units last year. He hopes to update BD’s Mongolian Grill and Flat Top, he said.
On deck are several deals that Majewski can’t yet disclose: a single-unit concept out of Birmingham, Ala., run by a “rock star” that he feels just needs the tools to grow. There’s also a 42-unit limited-service chain.
This summer, Craveworthy will also debut two more as-yet-unnamed concepts created in-house: One focused on breakfast and the other on pasta. Majewski said he’d love a coffee concept too.
He’s looking for that brand that could become a 1,000-unit chain—understanding that not all of them will be a hit.
“Out of the group we have, we’re confident we’ll have two or three that have the potential to [reach 1,000 units],” he said. “Others will be 50-100 [units], or 100-200.”
Fundamentally, Majewski said he’s creating an ecosystem where franchisees will not feel the need to leave the fold to work with other brands.
“My philosophy is: if you do what you say you’re going to do and your franchisees get return like they’re supposed to, and you’re truly a partner with them, they’ll never have to leave because you’re taking care of them day in and day out,” said Majewski, who has been a franchise operator and was CEO of Jimmy John’s for five years.
“Everyone will say, ‘Oh no, we care about our franchisees.’ But then the buildout cost goes up and then you’ll take an extra nickel over here. And then you’re putting Italian tile on the walls when you don’t get any return on that. And that’s never been my philosophy,” he said. “I’ve been a franchisee. I’ve lived the pain.”
Majewski was recruited fresh out of college to the Jimmy John’s CEO seat by founder Jimmy Liautaud, an experience that Majewski described as being “thrown into a lake by yourself.”
He likes to tell the story about how Wendy’s founder Dave Thomas reached out to him at the time, having heard of his struggles. Thomas offered to be a mentor, calling Majewski on a regular basis for two years to help him get to a solid footing as a leader.
Majewski sees Craveworthy and the infrastructure he’s building as offering the type of support structure other young or emerging leaders might be looking for.
“We want to make our team and our franchisees millionaires over and over again,” he said, “but to do it with an integrity that they actually have the support and structure and knowledge where you’re not just thrown in to sink.”
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