Hargett Hunter to Invest in Trudy’s
July 31st, 2020
Austin, TX – Hargett Hunter Managing Partner, Jeff Brock, discussed his first time eating at Trudy’s 20 years ago and how he plans to support the brand in an article written by Marissa Luck in the July 27, 2020 edition of CoStar News.
The article, How a Mexican Martini Got an Investor to Buy a Popular Austin Tex-Mex Chain, is available here and below.
It all started with a martini. Jeff Brock’s first visit to Texas nearly 20 years ago began with a trip to Trudy’s Tex-Mex restaurant in Austin with his best friend, a student at the nearby University of Texas. Brock fell in love with the popular Austin eatery’s food and its Mexican martinis, a variation of a margarita in a martini glass.
“I will never forget, I thought it was the coolest thing in the world. Literally it was the first place we went, so it’s something that I’ve just always connected with; I’ve always known about it and followed through the years,” said Brock, who is now the managing partner of Hargett Hunter, a Raleigh, North Carolina-based private equity firm.
Fast forward 19 years, and Brock and his firm are taking over four properties owned by Trudy’s as the winning bidder of the Tex-Mex chain’s portfolio in a court-ordered bankruptcy auction. The bid is scheduled to be finalized in federal bankruptcy court in late August, when Hargett Hunter plans to formally take over the restaurants, Brock said.
Hargett Hunter invests in emerging restaurant concepts and long-time favorites that its executives are willing to bet they can grow and make more competitive. As for Trudy’s, Brock said the firm may look at bringing the chain’s famous Mexican martinis to other cities after the pandemic eases. The move shows one recipe for restaurants to survive and emerge with a potential property growth plan in a pandemic that’s slamming eateries across the United States.
“If you’ve got something fantastic, you can hone in on a replicable, scalable model,” Brock said, and “put money into prudent, appropriate growth.”
Trudy’s represents the first investment in Austin for Hargett Hunter, which focuses on the restaurant industry and has investments throughout Texas, California, the Southern United States and has an office in Dallas.
Hargett Hunter is excited to “to be able to support a 45-year-old brand in one of the greatest markets in the country,” said Brock in an interview with CoStar News. He hinted the brand could see future expansions in other cities or locations when the pandemic eases.
“Sadly, Austin has already seen a rash of announcements of iconic and local names that have closed and aren’t reopening. We want to bring certainty to this brand that people don’t have to worry about it” disappearing, said Brock.
Hargett Hunter is buying the four-property portfolio, which includes three Trudy’s and the South Congress Café, for $6.5 million, said Stephen Sather, a bankruptcy attorney with Barron & Newburger PC that represented Trudy’s in the auction. Hargett Hunter beat out multiple other interested buyers, including the owners of the Austin eateries El Arroyo and Abel’s on the Lake in partnership with Woodgen LLC; the owners of Steiner Ranch Steakhouse in Austin; family office Blueprint Capital Management; and Houston real estate developer Radom Capital.
Hargett Hunter is buying the portfolio along with multiple investors and a partnership with Austin restaurateur Dan Smith, who will oversee operations, Brock said. Smith previously was CEO at Elliot Advantage, the consulting division of hospitality firm The Elliot Group, as well as president and CEO of the Turntable Restaurant Group, an affiliate of China Grill Management.
While Trudy’s restaurants are open for dine-in service with limited capacity, Hargett Hunter plans to use the slower period during the pandemic to make some upgrades to the buildings, Brock said.
In the short term, Hargett Hunter plans to invest in refreshing and upgrading some of Trudy’s existing properties without significantly overhauling the spaces or menus.
“We don’t want to change anything that has made this thing great and created this loyal following it has. We’d like to put money into the stores, dress them up for people to feel like it’s going to be there for another 45 years,” Brock said. “We’re not the type of people to come in and want to make major changes to anything, particularly something that has been able to survive as long as Trudy’s has survived.”
Brock said Hargett Hunter is always seeking new investment opportunities, even during the pandemic, when restaurants have been particularly hard hit.
“We have a very active pipeline of [investments]. I expect us to make another investment before the end of the year. There is a decent likelihood we could invest in three to four opportunities,” Brock said.
Elsewhere in Texas, Hargett Hunter has investments in other restaurant concepts including the American bistro concept Bellagreen in Houston and Dallas and the healthy, fast-casual concept Original ChopShop Co. in the Dallas area. The private equity firm is also an investor in the fast-casual Asian, concept Marugame Udon, which is adding two locations this year in the Dallas area. Further in the future, after the pandemic, Hargett Hunter also is looking for spaces to expand the tech-driven burger chain, Stacked, possibly in Dallas, Austin or Houston, Brock said.