News

Modern Market, Lemonade create restaurant group, remain separate brands

February 20, 2019

Lemonade Restaurant Group and Modern Market Eatery have joined forces to create Modern Restaurant Concepts as a way to help both brands improve everything from their back-end capabilities and customer experience to food costs, said Modern Market co-founder and co-CEO Anthony Pigliacampo.

"This merger creates a platform with the scale necessary to truly disrupt the restaurant landscape," he said in an interview with FastCasual. Pigliacampo will continue in that role at Modern Restaurant Concepts, alongside Rob McColgan, the chain's other co-founder and co-CEO. Although the merger means that the companies will share operational platforms, they'll continue to operate and expand separately via corporate growth in addition to franchising and licensing.

"We both stand for chef-driven, sustainable food, but we do it in very different ways, and we thought, 'If we put them together we could get the 1 plus 1 = 3.' We'd have the scale of a bigger brand and be able to offer better benefits and support to employees."

For example, both chains, which each has about 30 units, use non-GMO Canola oil and can now source it as a nearly 60-unit company.

"That changes the supplier network, Pigliacampo said. "We get high-quality for a reasonable price."

That's just one of the many benefits of merging. Others include developing customer integration with the third-party vendors they share and increasing their human resources offerings, including better employee benefits and training.

"We both planned to get here on our own, but now we can do it more quickly," he said.

What about cannibalism?

Since Lemondae is based in California, and Modern Market operates in Colorado, Texas, Arizona, Washington D.C. and Maryland, they aren't competing in the same markets. They do, however, share the same investor —  Butterfly —   a Los Angeles-based private equity firm. As part of the transaction, global investment firm KKR will contribute its investment in Lemonade to the merger and become a shareholder in Modern Restaurant Concepts alongside Butterfly and the management team. Financial terms of the transaction were not disclosed.

"After working extensively with Lemonade and Modern Market Eatery over the last few years, we are confident that this merger will combine two powerful brands with an incredible team," said Butterfly co-founder Adam Waglay. 

Larry Kurzweil, the most recent CEO of Lemonade, will resume his role as operating partner of Butterfly and adviser to the company.

"Lemonade's merger with Modern Market Eatery is a major inflection point in the development of both brands, and we look forward to joining forces with the Modern Market Eatery team," said Lemonade co-founder Ian Olsen, who has also joined the newly formed company.

Modern Restaurant Concepts today also announced that it has hired veteran restaurant executive Jim Sullivan, former CDO of Carl's Jr. and Hardee's parent CKE Restaurant Holdings, as its CDO.

"With Lemonade and Modern Market Eatery under one roof, we will have an offering that will thrive in more markets and non-traditional foodservice outlets across the U.S. than any comparable single-concept company," said Sullivan. "We look forward to partnering with franchisees and landlords across the country to bring these great concepts to their markets and customers."