Olive Garden Parent Company Just Bought Ruth’s Chris Steak House
The Italian-American restaurant company Olive Garden has earned a reputation for offering a family-style dining experience and is most renowned for its extensive menu of pasta dishes and unlimited breadsticks. For many years, the chain was linked with the slogan “When You’re Here, You’re Family.”
The Parent Company of Olive Garden, Darden Restaurants, also owns a variety of other dining establishments, such as Eddie V’s, The Capital Grille, Longhorn Steakhouse, And others.
Due to the Company’s upcoming acquisition of Ruth’s Chris Steak House, as reported by CNBC, it may now add one more well-known brand to its list.
When Ruth Fertel bought Chris Steak House, a restaurant with a location in New Orleans, the steakhouse franchise was born. The terms of the sales agreement prohibited Fertel from using the steakhouse’s name at any other eateries.
She gave these New Establishments the name Ruth’s Chris Steak House in order to assure brand recognition, and the rest is history.
A Lucrative Deal in the Making
The Parent business of Ruth’s Chris Steak House, Ruth’s Hospitality Group, was the target of a takeover announcement from Darden Restaurants on May 3.
Darden Spent $715 million on the transaction, But based on the strength of the steakhouse business, the company believes the investment will be profitable. Sales at the company’s more than 150 sites worldwide were $505.9 million in 2022. Additionally, the steakhouse’s shares are at $21.50 each.
The Most recent financial quarter has been successful for Darden’s fine-dining restaurants. For instance, same-store sales, a metric that concentrates on the development of a business’s current stores as opposed to expanding premises, increased by 11.7% for the company.
Prior To the deal, Darden paid $780 million in 2017 for Cheddar’s Scratch Kitchen.
Some have hypothesized that the prolonged time between acquisitions is related to high loan rates, which make buying new businesses less appealing.
Darden’s deal has not yet been finalized; however, it’s important to take that into account. If the parties satisfactorily meet the terms of the contract, the closing date is anticipated in June.
Ruth’s Chris Steak House is a Complementary Addition to Darden’s Portfolio
The sale represents a sudden and significant transformation in the food-service industry. Businesses have paused acquisitions as they focus on revitalizing their existing brands for various reasons, including rising expenses and increasing borrowing rates.
However, the two companies in question have a long history of changing ownership and engaging in market activity.
Businessman Chris Matulich established Chris Steak House in New Orleans, the place where Ruth’s Chris Steak House had its beginnings. When Ruth Fertel acquired the restaurant in 1965, a contractual clause prevented her from using the original name.
Under the name Ruth’s Chris Steak House, she started franchised locations. The Company went public in 2005 after Fertel sold the majority stake To Madison Dearborn Partners, a Chicago-based private equity firm, in 1999.
In 1968, Bill Darden opened the first Red Lobster restaurant in Lakeland, Florida. Two Years later, he sold the idea To General Mills. He Continued to work for General Mills as a vice president, Where he oversaw the expansion of the Red Lobster franchise.
By adding Olive Garden to its restaurant lineup, General Mills expanded its restaurant selection. In 1995, it split off its restaurant holdings as a public corporation to refocus on consumer goods.
According to Rick Cardenas, CEO of Darden, Ruth’s Chris is a powerful and distinctive brand in the fine dining market with a long history.
It satisfies our requirements for adding a brand to our portfolio and further our successful approach. Ruth’s Chris is a wonderful addition to our assortment of brands.
Conclusion
An interesting development in the restaurant business is the parent company of Olive Garden purchasing Ruth’s Chris Steak House.
The high-end steakhouse market entry and portfolio expansion by Darden Restaurants present considerable opportunities for development and diversity.
Darden Restaurants wants to improve the customer experience and take advantage of new expansion prospects by integrating the assets of both brands while keeping their unique identities.
It will be interesting to watch how these two venerable restaurant companies do under their new relationship as the merger process develops.
Frequently Asked Questions (FAQs)
Other Well-known brands owned by Darden Restaurants include The Capital Grille, Cheddar’s Scratch Kitchen, And LongHorn Steakhouse.
The Olive Garden menu is not anticipated to be directly impacted by the transaction. Each brand will keep its distinctive menu options, preserving the particular identities and client preferences.
Although precise plans have not yet been made public, Darden Restaurants now has a fantastic opportunity to introduce the Ruth’s Chris Steak House name to new markets.
Darden Restaurants has stated that they will retain the skills and know-how of Ruth’s Chris Steak House. They anticipate that current workers will stay on, and as the brand grows due to the acquisition, new job possibilities may arise.
The branding and logos of Olive Garden and Ruth’s Chris Steak House are not currently being merged. While looking at possible collaborations, both businesses will keep their unique identities.