We would like to keep you informed on this latest ground-breaking news! The $238 million deal includes 55 Popeyes locations—a new brand for the company—and 166 Burger King restaurants.
Giant Burger King operator Carrols Restaurant Group is getting into a second brand with the purchase of 55 Popeyes Louisiana Kitchen locations.
The transaction was part of a $238 million deal that will give the company an additional 221 restaurants.
Carrols will acquire the restaurants from Cambridge Franchise Holdings, along with 166 Burger King locations. The restaurants are in 10 states throughout the South. Carrols’ stock soared 19% on Wednesday.
The deal is being structured as a merger. Cambridge will receive Carrols stock in the deal, giving the company about 24% of Carrols shares. Carrols will also assume $100 million worth of Cambridge debt.
Carrols is Burger King’s largest franchisee, generating well over $1 billion in annual sales and now operates more than 1,000 Burger King and Popeyes locations.
Carrols acquired the “right of first refusal” to buy Burger King locations in 20 states from the franchisor in 2012. As part of the deal it received prior approval from the brand to operate 1,000 locations.
With the 1,000-unit limit reached, Carrols has entered into a new area development agreement with Burger King that will enable it to buy up to 500 additional locations.
The agreement also expands the company’s right of first refusal to additional states, including Arkansas, Louisiana, Mississippi and Tennessee.
Carrols has relinquished its right in several other states: Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York and West Virginia.
Carrols has also agreed to develop 200 new Burger King locations and remodel additional locations in the “Burger King of Tomorrow” image, which includes kiosks and outdoor digital menu boards.
Carrols will receive the right of first refusal for Popeyes in Tennessee and Kentucky.
Popeyes, like Burger King, is owned by Restaurant Brands International. The Popeyes locations are in Kentucky, Louisiana, Mississippi and Tennessee, and the deal includes a contract to build 70 new locations over the next six years.