Ontario-based Cara Operations Ltd. is acquiring an 89.2 per cent stake in Calgary’s Original Joe’s Franchise Group for $93 million.
Cara already owns Swiss Chalet, Milestones, East Side Marios and other restaurant chains.
The Original Joe’s Group is anchored by its 66 Original Joe’s restaurants and has 99 corporate, franchise and joint venture restaurant-bar locations. Its stable includes 23 State & Main locations, 10 Elephant & Castle pubs and a general contracting company that designs and builds restaurant and retail locations.
Original Joe’s corporate head office will remain in Calgary under the leadership of president and CEO Derek Doke, who will also be a minority owner of Original Joe’s Franchise Group through Franworks Franchise Corp.
Cara CEO Bill Gregson told analysts on a conference call that Original Joe’s is a “natural fit” because of its strong management team, the opportunity to grow profit margins through increased size and its presence in Western Canada.
Cara has about one restaurant per 21,000 people in Ontario compared with one per 59,000 people in Western Canada.
Original Joe’s Franchise Group will use $90 million from Cara to re-acquire its trademarks and royalty rights. This will allow Original Joe’s to retain about $12.6 million in annual royalty payments.
The Original Joe’s transaction, subject to approvals, has a targeted closing date of late 2016.