Cara Operations bulks up with New York Fries
Canadian restaurant giant strikes friendly deal to buy successful 31-year-old fry maker.

thestar.com
Sept. 1, 2015
By Lisa Wright

Cara Operations Ltd. is looking to supersize its giant network of popular Canadian restaurant chains with the purchase of Toronto-based veteran New York Fries.

The two announced Tuesday an undisclosed, all-cash deal to bring the 31-year-old French fry maker on board with Vaughan-based Cara, Canada’s oldest and largest full-service restaurant firm, which began publicly trading on the Toronto Stock Exchange last April.

Cara owns Harvey’s, Swiss Chalet, Kelsey’s, East Side Mario’s, Montana’s, Milestones, Prime Pubs (Fionn MacCool’s, The Merchant), Casey’s, Bier Markt and Landing Restaurants, including Hunter’s Landing, Harper’s Landing and Williams Landing.

The addition of NY Fries will help diversify Cara’s portfolio of stores into shopping centers, where Cara’s existing brands have limited presence, said Cara chief executive Bill Gregson.

“I’ve always had a craving for fries,” joked Gregson in an interview.

“New York Fries has a strong track record of growth, profitability and product development. It’s an attractive acquisition for us,” he said.

Cara wants to grow NY Fries as a stand-alone company, and has no plans to sell the tasty taters at Harvey’s, Swiss Chalet or its other restaurants, said Gregson.

The Canadian spud company - which never entered the U.S. market - was founded in 1984 by Jay Gould and his brother, who thought there was a market for premium fresh cut fries after first tasting them on a trip to the Big Apple. After that they bought the company.

“I decided some time ago I would look for an appropriate buyer. We had a number of suitors,” said Gould, though he wouldn’t divulge who else was interested.

He said Cara was the best fit and quickly rose to the top of the list of potential buyers for the chain that started out in the Scarborough Town Centre with just three sizes of fries and three sizes of pop. They’ve since expanded with hot dogs and poutine.

“Obviously it’s with mixed emotions (selling the company), but at the end of the day, money talks,” Gould said with a chuckle.

French fries remain the number one prepared food item purchased outside the home in Canada, he noted.

Gould will continue to run and grow his 10-year-old South St. Burger Co. chain, which has 33 locations in Canada and abroad.

Through takeovers and an effort to boost sales at its existing chains, Cara has set an ambitious target to grow sales to between $2.5 billion and $3 billion within five years, up from $1.7 billion in 2014, the company says.

“It’s exciting. These guys are on a buying spree,” said Robert Carter, executive director of food services at NPD Group.

“New York Fries is a pretty established player with good brand recognition. It makes sense because Cara is heavily weighted in full-service restaurants and wants to move more into quick service,” Carter added.

The deal is expected to close in the fall.