Eight years after he founded Lime Fresh Mexican Grill, John Kunkel is ready to let his baby go.
Kunkel will close Wednesday on a $24 million cash deal to sell the homegrown South Beach fast-casual chain to Ruby Tuesday.
The deal came after Kunkel examined various alternatives to raise capital in order to speed up growth of the brand he started in 2004. Ruby Tuesday had first entered into a licensing agreement with Kunkel about a year and a half ago, which gave them the rights to expand the Lime nationally.
“As a small operator there was no way I could roll out 50 new stores in the next year,” Kunkel said. “This was the best of both worlds. They have the capital to grow the brand and the infrastructure to support the growth.”
While Kunkel will step down as Lime’s chief executive officer, he will remain involved with the brand’s growth. Kunkel’s Miami-based 50 Eggs Restaurant Group will retain ownership of the original South Beach Lime location as a franchisee and that store will continue to serve as a model for franchisees and new product tests. Kunkel will also become a member of Ruby Tuesday’s board of directors.
Lime currently has 16 stores, including nine in Miami-Dade and Broward counties. Ruby Tuesday opened Lime’s first stores outside Florida, expanding the chain to Atlanta, Washington, D.C., and Alabama.
“We’re excited about this brand,” Samuel E. Beall, Ruby Tuesday’s executive chairman and chief executive officer told analysts last week. “It represents excellent new unit growth opportunity in the high-quality fast casual sector and has the potential to create extremely good returns.”
Tentative plans call for expanding the brand in Florida and throughout the U.S., opening 20 Lime restaurants next year and 30 in fiscal 2014, Beall said. Lime’s Florida restaurants have been achieving same-store sales growth this year ranging from high single digits to low double digits, Beall said. Read More