Cara Acquiring Original Joe’s for $93 Million
CBJ — The Original Joe’s, State & Main and Elephant & Castle restaurant-bar chains will be acquired later this year by Cara Operations, which sees the expansion as a perfect opportunity to increase its food and beverage presence in Western Canada.
Cara will pay $93 million for a majority stake in Original Joe’s Franchise Group, which will remain under its current management and keep its corporate head office in Calgary.
“Original Joe’s is a natural fit for Cara. The majority of Original Joe’s restaurants are located in Western Canada, an area where Cara is currently under-represented,” Cara CEO Bill Gregson said in a media release.
Original Joe’s president and CEO Derek Doke said “the opportunity to partner with Cara was attractive from a strategic and synergistic perspective.”
The bulk of what Cara pays, $90 million, will be used by Original Joe’s Franchise Group to re-acquire its trademarks and royalty rights from Diversified Royalty Corp., which also owns the Sutton real estate brand and the Mr. Lube franchise business. This will allow Original Joe’s to retain about $12.6 million in annual royalty payments now paid to Diversified Royalty.
Cara Operations currently has about 1,000 restaurants in its network, including Harvey’s, Swiss Chalet, New York Fries and the Kelsey’s, East Side Mario’s, Bier Markt and other casual dining restaurants.
The final sale is subject to approvals, with an anticipated closing date prior to the end of 2016.