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Red Robin Gourmet (RRGB) Acquires Franchised Stores in Texas


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Red Robin Gourmet Burgers, Inc. RRGB , a casual dining restaurant chain, announced that it has acquired 13 Red Robin franchised restaurants in Texas. The company acquired these restaurants from Cowboy Red, L.C., Cowgirl Red, LLC, and Texas Red Real Estate, Ltd. and its affiliates, as well as Robert Y Reynolds and Carolyn Frost Keenan. These 13 restaurants are located across Houston, Dallas, Lubbock, Austin, Abilene and Amarillo.

The acquisition will enhance Red Robin's strategy to expand in markets such as Texas that offer strong growth prospects. The company will employ 800 new members under its payroll.

Given its a viable business strategy, Red Robin is one of the most recognized restaurant chains with a family friendly ambiance. The chain has seen an uptick in revenues over the past few years. Apart from its sales initiatives, the acquisition of franchised restaurants is also contributing to its top-line growth.

Unlike other quick-service giants like McDonald's Corp. MCD and Yum! Brands, Inc. YUM that rely mainly on franchising, Red Robin remains focused on company-owned restaurants in order to have full control over both operations and the profits. The company acquired 36 franchised restaurants in 2014 that contributed $49.4 million to restaurant revenues from the date of acquisition through the end of the fiscal year.

Red Robin continues to focus relentlessly on unit expansion even amid the uncertain economic conditions. Backed by a recovery in customer confidence, management has strategically accelerated unit openings. However, the company lays emphasis on accurate site selection and selects only those sites that will surely yield the maximum benefit. The company is presently exploring new development opportunities in the untapped markets of Florida, New York, New Jersey, Chicago and Texas to further enhance its domestic presence.

Buffalo Wild Wings Inc. BWLD is another stock in the restaurant space that is following in Red Robin's footsteps.

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YUM! BRANDS INC (YUM): Free Stock Analysis Report

BUFFALO WLD WNG (BWLD): Free Stock Analysis Report

MCDONALDS CORP (MCD): Free Stock Analysis Report

RED ROBIN GOURM (RRGB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Business , Investing , Stocks
Referenced Symbols: YUM , MCD , RRGB




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