Arby's former CEO is building a fast-food empire

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Arby's former CEO is building a fast-food empire

Paul Brown Arby's CEO

Hollis Johnson/Business Insider

Arby's parent company Inspire Brands is

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  • Arby's parent company, Inspire Brands, announced plans to acquire burger chain Sonic in a $2.3 billion deal on Tuesday.
  • With the deal, Inspire Brands' portfolio - which also includes Buffalo Wild Wings and Rusty Taco - will comprise more than 8,000 locations with combined system sales exceeding $12 billion.
  • Here's how the new restaurant empire is shaping up.

Arby's parent company Inspire Brands is creating a fast-food empire.

On Tuesday, Inspire Brands announced it is acquiring burger chain Sonic for $2.3 billion, including debt. The deal follows Inspire Brands - which is owned by private-equity firm Roark Capital - closing on a deal to acquire Buffalo Wild Wings and Rusty Taco earlier this year.

"We like brands that are great brands, that have gone through a period of great success, and may be in a temporary period with a little bit of a challenge, where there's an opportunity to come in and get it back on a path," Inspire CEO Paul Brown told Business Insider at the time.

Restaurant conglomerates like Inspire Brands, Restaurant Brands International (parent company of Tim Hortons, Burger King, and Popeyes), Yum Brands (parent of Pizza Hut, Taco Bell, and KFC), and JAB Holdings (owner of a range of brands including Krispy Kreme, Panera, and Pret A Manger) are on the rise.

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With the deal, Inspire Brands' portfolio will comprise more than 8,000 locations with combined system sales exceeding $12 billion, according to figures provided by the company.

Here's how Arby's CEO has begun his quest to create a new restaurant empire.

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Arby's

For Inspire Brands, Arby's is the chain that started it all. Brown led Arby's in an impressive turnaround effort after joining as CEO in 2013, taking risks designed to make Arby's stand out and grab headlines.

"We had to one, come up with a way of talking about ourselves in a voice that actually stood out, but we also had to be more creative about all the channels that you could use to get the message out," Brown told Business Insider in 2017.

Buffalo Wild Wings

In November 2017, Arby's announced plans to acquire Buffalo Wild Wings for about $2.9 billion. In February, the company announced it had closed the deal and was forming Inspire Brands with Brown at the helm.

"I think there's an opportunity to step way back and say it's not and let it define its own category — a little bit of what we did with Arby's," Brown told Business Insider in February.

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Rusty Taco

Rusty Taco, a chain with just 28 locations, was part of the Buffalo Wild Wings deal. But, it's unlikely that Inspire will purchase another similarly small brand.

"Buying really small brands and trying to really grow them is not part of the stated strategy," Brown said in February.

"We like R Taco, which came along with Buffalo Wild Wings, and that has some opportunity to do some fun and interesting things with it," Brown continued. "We like to incubate a brand or two along the way, but that's not our stated strategy."

Sonic

Sonic — known for its burgers, quirky menu items, and extensive beverage options— is the largest drive-in chain in the US with more than 3,600 locations. The chain will continue to operate as an independent brand out of its Oklahoma City headquarters.

"Sonic has had a significant focus on innovation, especially in guest-facing digital technologies," Inspire Brands said in a statement. "In addition, its menu — especially its beverage innovation — is truly unique. Each of these areas are great growth opportunities for Inspire's current brands."

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