Brazos Partners is a company founded by Randall S. Fojtasek, Jeff Fronterhouse, and Patrick McGee in 1999. It is a Leverage Buyout Firm that targets companies with enterprise values between $50 and $250 million, solid management, a well-defined niche and is often close to the Brazos’ Dallas home. Location is an essential part of Brazos cooperate strategic management; according to Patrick McGee Texas is the 11th largest stand alone economy in the world and has the third largest universe of public and privately held mid-market companies in the US. In addition, it is very underserved with only a dozen LBO groups, most of which were energy specific.
In 2002, Brazos was contacted by an investment banker about a deal with Cheddar’s Inc., which had years earlier failed to reach a deal with a buyout firm in New York. Initially hesitant because of the firm’s lack of knowledge in the restaurant industry, Fojtasek was intrigued during a meeting with CEO and cofounder of Cheddar’s Aubrey Good. Cheddar’s had experienced success since it opened in 1978 and was looking for a partner to help with succession plans and capital for expansion and to buyout original investors. By the time they signed the deal in April 2003, the company had grown to 42 restaurants in thirteen states. Of those, eighteen were company owned and balanced franchised.
In the casual dining industry Cheddar’s had carved a unique niche. The quality and value of its food created remarkable customer loyalty, with over 94 percent repeat patronage. Within ten months of its acquisition by Brazos, Cheddar’s had outperformed even its own management’s expectations. Rather than the anticipated expansion rate of two restaurants per year outlined in their deal, the company was on a trajectory of adding four to five per year. In April of 2004, the management group
