Elite Restaurant Group, which recently purchased the 68-unit Gigi’s Cupcake chain out of bankruptcy, has bought another struggling restaurant brand.
Mike Nakhleh, president and owner of the Los Angeles-based multi-unit restaurant company, said Elite has acquired the last corporate-owned Project Pie restaurants. Terms of the deal were not disclosed. Nakhleh said the purchase includes three company restaurants in the greater San Diego area, two international locations and intellectual property rights.
Two Project Pie restaurants run by franchisees in California are not part of the deal, he said.
Elite plans to immediately rebrand the Project Pie stores into Patxi's Pizza, a full-service deep-dish pizza concept acquired by Elite last year.
“We think it will easily convert. Plus, it gives us an instant footprint in Southern California,” Nakhleh told Nation’s Restaurant News.
Elite also plans to convert the international locations, though the rebranding might not happen as fast, Nakhleh said.
Carlsbad, Calif.-based Project Pie, which has seen a few ownership changes over the years, currently has a development agreement for 50 restaurants in Asia. Those new restaurants will become Patxi's.
Elite’s latest purchase brings the company’s total unit count to 135 -- nearly half of those are Gigi’s. Elite’s other brands include Slater’s 50/50 and Daphne’s Mediterranean.
Buying financially troubled brands and converting them to other concepts is part of Elite’s playbook. Last year, Elite bought Noon Mediterranean in a bankruptcy deal. This year, Elite converted the restaurants to Daphne’s while still maintaining a few elements from Noon.
Last week, Elite closed 11 hybrid Noon-Daphne’s restaurants in Austin and Dallas.
With Project Pie, Elite has no plans to blend the brand with Patxi's. The three San Diego-area stores will adopt Patxi's full-service look and menu of deep-dish pies.
The brand has restaurants in Northern and Central California, Seattle and Colorado. A Patxi's with a new store design is planned to open in November in Los Angeles.
“We went back to an old school pizzeria look with exposed brick,” Nakhleh said.
Elite’s purchase of Project Pie essentially ends future growth of the build-your-own pizza brand, founded in 2012 in Las Vegas to compete in the emerging fast-casual pizza space. The Carlsbad, Calif.-based chain was founded by James Markham — a co-founder of Seattle-based MOD Pizza and Rancho Santa Margarita, Calif.-based Pieology Pizzeria.
In 2016, Pieology bought Project Pie, which at the time had about 20 units. Soon after, San Diego investors bought the brand from Pieology; those investors sold the company to Elite, Nakhleh said.
Nakhleh, a former Sizzler and Fatburger franchisee, said Elite’s buying spree is not over. He said he’s in talks to buy a 35-unit brand that he plans to convert to Slater’s 50/50.
When he bought the six Slater’s 50/50 restaurants in 2017, he said he intended to grow the bacon-centric full-service brand to as many as 60 units over the next five years.
With nearly a dozen locations now, Slater's 50/50 will come close to hitting that mark if Elite buys the other undisclosed brand.
“There will be tremendous growth for Slater’s,” he said.
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