Following the Bain Capital private equity group acquisition of Brazilian steakhouse chain, Fogo de Chao in August, both the new ownership and restaurant leadership plan to accelerate the expansion of Fogo de Chão to a 15% growth rate annually, particularly in international markets. CEO Barry McGowan said that he is confident in the sale of the brand from Rhône Capital to Bain Capital, especially considering the latter private equity group’s successful development work with Bloomin’ Brands, Burger King, Domino's, and Dunkin in the past.
“We’re thrilled to be working and partnering with Bain for this next chapter of growth—they bring immense experience in restaurants,” McGowan said. “We’re culturally aligned with them-- they see the differentiation and uniqueness of our brand….and they want to unlock what we think is the next chapter of growth, not just in site development, but in unlocking consumer insights.”
McGowan said that although the company is nearing its 50th birthday in 2028, Fogo de Chão is still in the early stages of development and brand awareness with 80 locations globally. The company just announced its next development deal of 10 leases, and plans to open its 100th restaurant globally and reach $1 billion in revenue within the next five years.
“10 years ago, we had no global partners, and today we have 10, and in the next five years we’ll have 25 across 30 countries,” McGowan said. “We're just extending that global reach one partner at a time, but it's been a slow step-by-step process. Growth with Bain moving forward is going to be global, and It's going to be concentrated around brand building and penetrating new markets effectively.”
McGowan said that since Fogo is in a category almost unto itself (experiential upscale dining), the company’s development strategy does not mirror its colleagues in the restaurant industry. When unlocking a metro area, he said that they will not “go too deep” with 20-30 restaurants, and instead might open 10 restaurants, both in the urban center and surrounding suburbs without “over-penetrating a market.” For example, right now, Fogo is fleshing outs is portfolio presence in Dallas, Los Angeles, and New York City, which actually helps overall with better purchasing, logistics, and supply to keep up the quality of each restaurant.
Beyond portfolio development and brand expansion, McGowan said that in partnership with Bain, they hope to unlock catering and off-premises growth, while also expanding upon the company’s menu development and restaurant redesigns already underway.
“We haven't really unlocked off premises yet, including event-style catering, so that will be a big play for us with Bain,” McGowan said. “We’re not trying to make it 20-30% of our business, like some people tried to [during the pandemic] but we think it could be 10% of our business today…. giving people the experience where they would like to have it versus just inside a restaurant. It’s truly incremental to us, especially as we’re on our ninth straight year of positive traffic.”
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