Restaurant brands set to IPO this year: Cava, Twin Peaks

With Cava and Twin Peaks set to IPO this year, Yahoo Finance food reporter Brooke DiPalma discusses why these companies are going public.

影片文字轉錄稿

- We're talking about a thawing of the IPO freeze. Yet another restaurant.

BROOKE DIPALMA: Yet another restaurant. And now FAT brands looking to take this specific business, Twin Peaks, public. Of course, it's a sports bar. It's a restaurant chain. It primarily looks like a lodge.

It was founded in 2005 in Texas. But then FAT brands acquired it back in October of 2021 for $300 million from investment firm Garnett station partners. Now in 2022, it's off same-store OCLs increased by 11.3% year over year.

As far as the timing and the exact size of the IPO, well, the company said that that's subject to market conditions and other factors. But what we do know is that FAT Brands will remain a majority owner. Now Rob Rosen and FAT brands co-CEO and EVP of capital markets telling Yahoo Finance why now is the right time. He said, quote Twin Peaks is the crown jewel of our portfolio. With our strong net margins and development pipeline, we are confident the chain will bring investor value for years to come.

Now, of course, FAT brands is mostly known for other brands, including Fatburger and Johnny Rockets. But as Akiko noted, this is just one of many restaurant chains looking to go public this year.

- Well, speaking of that, they're Brooke. We did get some of the terms set from Cava for their upcoming IPO. There's been a lot of comparisons drawn between Cava and Sweetgreen, and we know Sweetgreen hasn't performed too well. I guess how did the two stacked up, and what can we expect do you think from Cava?

BROOKE DIPALMA: Yeah, well, let's take a closer look at how sweetgreen has performed since its IPO. Its surge in its public debut. It went up to about $52 after its public offering. But as you can see here, a shares of Cava. They're planning to offer 14 million shares. They are set to price between $17 and $19 per share.

No timing on yet exactly will go public, but it does plan to list on to the New York Stock Exchange under Cava, and if you take a look at shares of Sweetgreen now, well, they're about down 80% since their IPO offering back in November of 2021. They're sitting about nearly $11 per share here.

And similar to Cava, Sweetgreen continues to struggle with profitability. We heard in the last quarterly results that we continue to gain sales momentum and we see profitability with reach. Cava also struggles with profitability. But this is just one company yet again looking to go public. We have others, including Panera brands, Korean barbecue chain, Jen restaurant group, as well as Brazilian steakhouse Fogo de Chao.

And so, ultimately, what we're looking for here is why exactly they're looking to go public. Well CEO of New Constructs David Traynor said that these companies are going public now because the market is willing to price them so high. So something interesting to take away there.

- [INAUDIBLE]

- David Trainor, who, by the way, said that he doesn't expect a very strong showing--

- He does not. He does not.

- We'll see. We'll find out.

BROOKE DIPALMA: Was it a cavastrophy like a catastrophe, cavastrophe.

- He didn't use that one with us.

- There you go. There you go.

[LAUGHTER]

I can just imagine the puns that are about to come. All right.

- [INAUDIBLE]

- Brooke DiPalma, thank you so much.