Darden Restaurants, Inc. (NYSE:DRI), operator of several casual and upscale restaurants, announced late Wednesday it has agreed to purchase Chuy's Holdings, Inc. (Nasdaq: CHUY) in a deal valued at approximately $605 million. The Chuy's deal gives Darden its first Mexican restaurant concept and tenth overall brand.
"Chuy's is a differentiated brand within the full-service dining industry with strong performance and growth potential," said Darden President and CEO Rick Cardenas. "Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy's is an excellent fit that supports our winning strategy."
Founded in Austin, Texas in 1982, Chuy's operates full-service restaurants serving a menu of authentic, made-from-scratch "Tex-Mex inspired" dishes. It was not until 2009 that the company expanded beyond Texas with a restaurant in Franklin, a suburb of Nashville. The company entered the Atlanta market in December 2011 with a location along Perimeter Center West in Dunwoody. The Atlanta market had by 2017 grown to four locations with a fifth planned, but there are just two in the area today.
The Dunwoody restaurant and the Kennesaw restaurant on Barrett Parkway remain open, but others at Akers Mill Square near Cumberland Mall, and near Avalon in Alpharetta closed in late 2019 and early 2020, respectively. A location planned for Peachtree Corners Town Center in Peachtree Corners was abandoned before it was ever built, with Lazy Dog Restaurant & Bar having opened on its site instead.
Chuy's went public in 2012 at which time it had 36 restaurants across eight states. Today, the company has 101 restaurants in 15 states, but about half of the units are in Texas. In the twelve months ended March 31, 2024, the company had an average annual restaurant volume of $4.5 million per unit.
 |
| For some Texans, Chuy's is as beloved as its larger Lone Star businesses |
The company has struggled to find the same kind of consistent, multi-unit success in new markets that it enjoys in Texas. In addition to the Akers Mill closure, the company closed a restaurant in Miami in January 2019 after only six months in business, followed by closures in Annapolis, Maryland, and Tuscaloosa, Alabama. A short-lived restaurant in the Miami suburb of Kendall later closed, as did units in Lakewood, Colorado (April 2024), and Kansas City, Missouri (June 2024).
Darden, an experienced operator with nearly 2,000 restaurants, will likely be seeking to leverage their size and marketing prowess as they look for future growth opportunities.
Chuy's prides itself in serving its food in a fun, eclectic and irreverent atmosphere, with each location offering a unique, "unchained" look and feel, as expressed by Chuy's motto "If you've seen one Chuy's, you've seen one Chuy's!" This originality would seem to be the antithesis of Darden, a huge operator of chain restaurants. For many customers, the bigger [Read: less special] a chain gets, the less compelling it becomes.
Darden is no doubt diversifying its portfolio in search of growth, but it must walk a careful course so as not to make Chuy's too "chainy."
In May Darden closed two "underperforming" LongHorn locations in metro Atlanta including one on Piedmont Road that served as the replacement of the brand's first ever restaurant.
2025 will likely be the year metro Atlanta becomes home to outposts of all current and upcoming Darden concepts. ToNeTo Atlanta reported in January 2024 that Eddie V's, Darden's upscale seafood and steak restaurant, is entering the market with a restaurant planned for Haynes Bridge Road in Alpharetta. The restaurant is expected to open next year.
What are your thoughts on Darden's purchase of Chuy's? Do you think Chuy's will change under Darden's ownership? What is your favorite Tex-Mex restaurant in metro Atlanta?
Please share your thoughts below
17 comments:
I like a lot of the Darden Restaurants especially Longhorn, Capital Grill, Seasons 52 & even Olive Garden. I've only been to Chuy's once in Dunwoody and it wasn't a great experience foodwise or with the the service I would try it again though. I look at being part of the Darden group as a positive thing.
Chuey's at Perimeter used to be really good. since COVID though, their menu has shrunk and their food is nothing special. you can find better Tex Mex at independent restaurants. hopefully Darden can bring it back.
Chuys at perimeter needs to go back to having daily specials. the same old menu gets boring after a while, specials make you want to come back.
My take from the list of Darden's concepts is why do they need three upscale steak restaurants?
I'd hardly call Longhorn "upscale" Not even by a longshot.
Eaten there only a couple times because it wasn't good.
I like to just make Old El Paso at home!
@Anon 9:37PM
Longhorn is not one of the three upscale steakhouses I was referring to.
Those are The Capital Grille, Eddie V's and Ruth's Chris.
Longhorn is a budget steakhouse, along with Outback and their far superior competitor, Texas Roadhouse.
And Ponderosa
Dunwoody has several superior mexican restaurants within 2 miles of Chuy's, all of which have loyal followings: La Parilla, Tin Lizzy's, Red Pepper, Superica, Chupito's, and El Azteca. Darden will change this to another concept soon.
I used to like Ponderosa, I remember going on a date when I was 20 years old. It’s not crappy it’s just a different experience. It is their own unique experience. I would take Ponderosa every time over golden corral. Are there any ponderosa close proximity to Metro ATL?
For a high-end steakhouse I prefer McKendricks in dunwoody. There’s also a really good steakhouse in an office building close to one of the concert venues I want to say in Alpharetta, but I may be wrong. Does anyone know of the one that I’m referring to?
El Azteca is really worse for the wear and is disgustingly filthy. I really like superica.
I think they overpaid for chuys
I thought cheys noodles was independent? Not darden
Visited the Kennesaw location for a birthday dinner many years ago.
Food quality and quantity along with poor service made this a one and done for a party of ten.
Maybe the new owners will be able to get things right.
The price is a lot of chips!
Just 101 locations!
The chibs are good tho. And salas. I go for that and quesso. Super scrumsh!
Post a Comment