Washington, D.C.-based private investment firm Blue Marlin Partners and Dallas-based private equity firm Trive Capital have partnered to acquire a majority stake in Mo’Bettahs Hawaiian Style Food from Savory Fund. Terms of the deal were not disclosed.
Mo’Bettahs was founded by Hawaiian-born brothers Kimo and Kalani Mack in 2008 in Bountiful, Utah. In 2018, it was acquired by Savory Fund, a private equity firm that invests in emerging restaurant concepts. Both Savory and the Mack brothers will retain minority stakes following the Blue Marlin/Trive deal.
The firms take over as the emerging chain experiences significant momentum – according to Technomic data, Mo’ Bettahs finished 2023 with 50 locations, a 31% year-over-year unit-count increase, with plans to add 20 additional locations by the end of 2025. The chain ended 2023 with about $80 million in sales, or just over 40% year-over-year growth. In an interview, Kimo Mack said the company should be close to $100 million in sales at the end of this year. Throughout the last three years, Mo’ Bettahs’ revenue has grown by a staggering 178%.
Fueling that growth is solid unit economics. During a recent interview, chief executive officer Rob Ertmann said the concept’s average unit volumes are close to $2 million, and store-level margins are in the mid-20% range. These numbers presented a compelling case for Blue Marlin, according to founder and managing partner Peter Kirsch.
“With our experience (including investments in Dunkin’ and Jersey Mike’s franchisees, as well as Mission BBQ), we understand the economics around restaurants and Mo’ Bettahs’ economics are great. They’ve done a great job building and controlling costs and that means everything in this business. The management team and Savory have done an awesome job creating efficiencies,” Kirsch said during a recent interview. “We also loved the Hawaiian concept. It’s a fresh, new concept in the marketplace.”
Indeed, while Hawaiian cuisine is growing, it’s still very much on the ground floor compared to some of its culinary peers. Blue Marlin’s investment signals Mo’Bettahs’ “next phase of growth” to fill in some of that white space, Kirsch said, and it has Mack asking why his concept can’t be the next CAVA or Chipotle. Ten years ago, he never would have thought such a thing, but a lot has changed since then.
“I’m excited to see what this can become. In my mind, we can be the next Chipotle, Panda Express, or Shake Shack. I didn’t use to think that. We were bus drivers, we weren’t businessmen. But now we have the right people supporting us. There has never been a doubt from Shauna or Andrew (Smith, founders of Savory Fund) and they’ve coached us through this to give us confidence,” he said. “If there’s a Hawaiian concept that’s going to compete with those bigger brands, why not ours?”
This mentality shift is exactly what Andrew Smith strived for when Savory made its initial acquisition of Mo’Bettahs nearly eight years ago.
“There are chapters in everybody’s book, and we invest in the first chapter of creation and growing into a regional brand. The next chapter – scale, proving the concept, profitability – a lot of brands don’t get that chance because they get stuck from a capital standpoint. Savory fills that chasm,” he said. “For Mo’Bettahs, we’re done proving the concept, the foundation is built, and the next chapter is national expansion.”
As this deal came to fruition, it was important for both Smith and Mack to maintain a minority stake and be a part of that next chapter. Mack and his brother will move into a founder’s role, while Smith will move into a board member role. Kirsch said Blue Marlin will retain the chain’s management team. As these new pieces fall into place, Smith is confident Mo’Bettahs is ready for primetime.
“This is a clean, strong, extremely profitable business trading hands for a good multiple. It’s approachable, simple, recognizable,” Smith said. “You can feel the culture in the stores. It’s important for the founders that customers understand the spirit of ohana (family). People buy into that. We believe the best is yet to come for this brand.”
Harrington Park Advisors served as the exclusive financial advisor to Mo’ Bettahs, and Mayer Brown served as legal advisor to Mo’ Bettahs and Savory Fund. Benesch served as legal advisor to Blue Marlin. Gibson Dunn served as legal advisor to Trive Capital.
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