News: Burger King franchisee Sun Holdings acquires Freebirds World Burrito

By Jonathan Maze on Aug. 19, 2024

The Austin, Texas-based fast-casual chain has been sold to the owner of Taco Bueno and franchisee of hundreds of restaurants such as Arby’s, Applebee’s, IHOP and Golden Corral.

Guillermo Perales has bought another restaurant chain.

Perales’ Sun Holdings, which operates more than 1,000 franchise locations of various brands like Burger King, Arby’s, Papa Johns and Popeyes, has acquired the Austin, Texas-based Freebirds World Burrito, the company said on Monday.

Terms of the deal were not disclosed, but this gives Sun its second brand. It already owns the Mexican chain Taco Bueno.

Sun has also acquired the debt on the casual-dining chain Uncle Julio’s, which could enable it to buy that chain.

“Freebirds brings a distinct and vibrant energy to our portfolio,” Perales said in a statement. “We believe we can learn from Freebirds in customer engagement and menu innovation, while bringing our expertise in operations and growth.”

Freebirds has been owned since 2007 by Tavistock Restaurants, but that operator appears to be more focused on upscale brands.

The fast-casual burrito chain finished 2013 with $118 million in system sales, up 8.4% from 2022, according to data from Restaurant Business sister company Technomic. The chain operates 64 locations, all but six of which are company owned.

Yet the brand has been in decline for years and has not recovered from pandemic-era losses. Unit count over the past decade has shrunk by 41 locations. System sales are down by 23% over that period, according to Technomic.

The sale to Perales continues a run of acquisitions in the restaurant industry by investors taking advantage of lower prices for some restaurant chains. Sun bought Taco Bueno first by acquiring the debt, then exchanging that debt for equity in the business. It could do something similar with Uncle Julio’s.

Other companies could be sold in a similar fashion, such as the struggling burger chain BurgerFi and the California-based Mexican chain Rubio’s—both of which could be sold to former Famous Dave’s CEO Jeff Crivello. Red Lobster was sold to Fortress Credit, which held the company’s debt.

Perales, who is aggressive at building locations, believes Freebirds is ready to grow again. “Freebirds is poised for growth,” he said. “We have an ambitious expansion strategy that we are excited to get to work on.”

Vin Batra from Soravine Advisors worked with Sun Holdings. Susan Miller and Sean Mirzabegian of Morgan Kingston Advisors worked with Freebirds.