All the places you begrudgingly eat at after going to Uniqlo could soon be under one umbrella.
What happened: Canadian restaurant operator Foodtastic is trying to mount a hostile takeover of fellow operator MTY Food, looking to acquire its rival at a nearly $1 billion price tag. MTY has rejected two previous offers from Foodtastic, and this new bid comes just weeks after it completed a strategic review where it decided against selling the business.
MTY is instead pursuing a strategy of reducing corporate-operated eateries and returning to a predominantly franchise-based model as it looks to revive slumping parts of the business. Also worth noting: the company sacked its CEO yesterday.
Zoom in: Foodtastic and MTY are two giants of the mall food court and fast-casual sit-down joint. The former is the operator of 30 brands (like Milestones, Freshii, and Quesada), while the latter owns more than 80 (like Thai Express, Mucho Burrito, and Wetzel’s Pretzels).
Foodtastic made headlines earlier this year by signing a licensing agreement to bring the popular U.S. coffee chain Dunkin’ back to Canada for the first time since 2018.
Why it matters: Corporate consolidation has been an ongoing trend in this segment of the Canadian restaurant industry for more than a decade, but this marks a new development: a consolidator skipping the pursuit of just one chain and going after another consolidator.
Our take: Retail Insider’s Q2 report namechecked Foodtastic’s “multi-brand franchising platform” as one of the main themes of Canadian food service this year. With Canada’s restaurant industry still unstable post-pandemic and 41% of operators reporting losses or just barely breaking even, consolidation could spread beyond food courts.—QH
