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Ruby Tuesday Sold to Investment Group, Why You Should Care

Ruby Tuesday Sold to Investment Group, Why You Should Care

News broke Tuesday, that NRD Capital group has acquired the entire Ruby Tuesday franchise for $2.40 per share – estimated to be $335 Million – in a release from Ruby Tuesday.

“Our focus at NRD is investing in quality restaurant companies and providing strategic and operational expertise to create sustainable value.  With a well-established brand, differentiated from other casual dining restaurants by its Garden Bar, we see significant opportunities to drive value for Ruby Tuesday,” said Aziz Hashim, founder of NRD. “We are excited to be part of the Company’s next chapter. As a private company, we will be able to take a long-term view on Ruby Tuesday, allowing us to make an investments in people, product, and customer experience, without public company constraints. This approach will enable us to reward everyone involved in our success, in addition to our investors.”

This on the heels of New Albany based Bob Evans Farms selling for an estimated $475 million net proceeds to private-equity group Golden Gate Capital.

Why Should I Care?

To put it bluntly, because more than the dollars you spend at these establishments their business practices will determine what type of food you are putting into your body. We expect “junk” food when we buy certain things but in the fast-casual market there is an assumption that means better quality.

However, most of these franchises are publicly traded companies – so it becomes the impossible task of serving two masters – the stock holders and the restaurant diners. And one has more influence at the corporate level, which is what led Bob Evans to radically shift approaches near the end before just selling the restaurant division off Golden Gate.

So the Investors Are Different How?

Assuming that these are not the hostile takeovers of the 1980s, we believe that NRD and Golden Gate are adding marquee pieces to their brand mix and have the knowledge and expertise to add to the restaurants they are buying. So in the long-run they can focus on improving the experience without having to worry about investor input.

Hopefully in the long-run we’ll see these chains become better.

One Reply to “Ruby Tuesday Sold to Investment Group, Why You Should Care”

  1. John F Kennedy will be RE-ELECTED President BEFORE I go into anther Ruby Tuesday, irrespective who owns it.

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