Article

Owners of Genghis Grill acquire Baker Bros. American Deli

November 15, 2011 by Valerie Killifer — senior editor, NetWorld Alliance

TheChalak Group Inc. has officially acquired 11-unit, Dallas-based Baker Bros American Deli. The Chalak Group also owns and operates 80-unit Genghis Grill, a fast casual concept featuring a build-your-own-bowl theme. TCG bought the concept from its founder, Ken Reimer, former CEO of Tony Roma’s, for an undisclosed amount.

Al Bhatka, CEO of The Chalak Group, said the company's goal is to position Baker Bros. in secondary markets. Chalak executives spent three years monitoring Baker Bros., he said, and will start elevating the concept experience for consumers beginning with the Dallas market.

Former Rockfish Seafood Grill CEO Henry Leonard has taken on the role of Baker Bros. president, while Jimmy Salas retains his position of COO/vice president of operations. Their main focus will be to re-energize the brand and stage it for regional growth.

Already, The Chalak Group has rolled out phase one of its plan to re-engineer the Baker Bros. menu. Four units in the chain are franchise operated.

“We expect great synergies between our brands and feel that Baker Bros. will provide growth avenues for our people in the organization," Bhakta said.

The Baker Bros. system will get operational support from The Chalak Group and at one time had 15-plus units. A competitive segment in addition to several real estate challenges led to several unit closures.

Bhatka said there are some obstacles ahead for the sandwich chain; however, there also are opportunities for growth.

“Both brands can benefit from increased buying power through shared vendors and also share in infrastructure needs as both brands grow," Leonard said.

This year, The Chalak Group will have opened 27 Genghis Grill locations and expect the same number of openings in 2012, Bhatka said. They also closed Bistro BabuSan, an Asian-fusion fast casual concept The Chalak Group opened in 2010.

Moving forward, real estate and commodities costs will be two significant factors impacting concept and revenue growth for both Genghis Grill and Baker Bros.

"We're starting to compete for sites again," Bhatka said. "And we're seeing commodities costs will continue to go up. For Genghis Grill, commodities are a huge thing. We'll have to get creative and flexible on pricing."

Baker Bros. America Deli was founded in 1999 by Ken Reimer and Tom Dahl. The chain started to franchise in 2003. In addition to Genghis Grill, The Chalak Group is invested in a combined 33 KFC, Taco Bell and Long John Silver's units.