This article first appeared in The Advisor in May 2023, a publication sponsored by Colliers Utah.
The Savory Fund, an innovative private equity firm that invests in emerging restaurant concepts, is catapulting up-and-coming restaurants into rapid expansion with capital investment and a deep knowledge of restaurant operational efficiency.
Led by food and beverage veterans Andrew and Shauna Smith, the Lehi-based fund owns and operates 145 restaurants in 11 states comprising nine brands. Over the last 15 years, the Smiths have grown a total of 320 restaurants, Andrew says. Savory is currently expanding in Florida, Texas, Southern California, Arizona, Idaho and across the Midwest.
In 2022, Savory hired more than 6,100 employees across its brands. This year, Savory plans to hire 11,000 employees, including more than 100 corporate positions across its portfolio, the company announced in a press release.
Savory closed its first $100 million fund in 2020, with a second $100 million closing in early 2021, Andrew says. The company will be launching its third round in the third quarter of this year and will be looking to find “another amazing five, six or seven brands” to help scale.
Andrew, who describes himself as “a recovering tech CEO,” says his wife Shauna was the impetus for their ventures into the restaurant industry 15 years ago.
“I’m from the south, so hospitality has been in my DNA for as long as I can remember,” Shauna says. “My belief was a restaurant could be run successfully like any business could be. I didn’t know much about it, but I think that actually served me well. I just went in learning.”
In 2009, the Smiths opened a Kneaders Bakery & Cafe franchise to provide a comforting place for people to have their French toast by the fire in the morning, Shauna says. Now, she’s the CEO of an explosive company. “I still think of myself as an operator,” she adds. “I try very hard to find my way into the restaurants when I can.”
What makes Savory so successful? “It’s having the money players, real estate players, operating players and even the concept players all on one team,” Andrew says. “Normally these are disparate parties, but for us, we’ve included it all into one. We’re also the team—we operate those businesses and scale them. We have the playbook and the experience of knowing when to grow them, how to grow them, how fast to grow them and where to grow them.”
Another key factor, Andrew says, is having the founders involved. Savory believes the founders carry the tribal knowledge around the uniqueness that has energized early success and is essential to future growth.“We have learned a lot in 15 years—so much—and some of it has been learning things the hard way of what not to do or how to do it better,” Shauna says. “We’ve curated [our team] for 15 years. Some of these people have been with us from the beginning. These are industry leaders—they’re brilliant, effective and so good at what they do. It’s not just about what we do, and it’s not just our playbook, but it’s the people who are really implementing all of that.”
Ultimately, real estate is the pinnacle, Andrew says. “Real estate is the way that you organically scale and grow that brand to becoming a regional—and then national—player on the stage of [food and beverage].”
Tyson Moore, a VP at Colliers specializing in retail tenant and landlord representation, has been working with the Smiths since their earliest days and handling all their real estate needs.
“I think Savory is the gold standard for Utah’s restaurateurs,” Moore says. He has watched hundreds of food and beverage brands approach Savory each year for engagement, but only a few are chosen.
Moore says the vast majority of Savory’s deals are leases, and the hardest part is finding locations with a drive-thru. These locations are at a premium since Covid. Another obstacle is just negotiating a fair market rent.
“Right now, it’s definitely a landlord-favored market,” Moore says. “In Utah, our biggest challenges are high construction costs and inflation issues. Rents have gone up over the last few years dramatically.”
Sometimes Savory seeks to buy property, depending on the brand. “When these markets are hot like they are, it’s hard to get landowners to sell the property you want,” Moore says. “Every deal is so unique and different, and you’re dealing with different personalities every time, so it keeps things exciting.”
So what advice do the Smiths have for Utah’s restaurateurs?
“I would say to partner with the right people, the right real estate agents, the right vendors, the right employees and the right team. Build a good team around you so that you can execute your plan really well and do everything you can to stand above your peers,” Shauna says.
Andrew’s advice is to not skip steps or place a high priority on moving fast. “Make sure each restaurant that you open is a success before you add another,” he adds. “Focus first on your one iron in the fire and get it white-hot.”
Given that the Utah market is among the highest growing in the country, Moore believes the future of restaurant expansion in Utah is bright. “We’ve got the combination of creative restaurant innovators that are coming up with new concepts. We’re getting an influx of other brands out of other states and national brands that are really interested in coming to Utah.”
The Smiths agree.
“We’re committed to Utah,” Shauna says. “Selfishly, we want to bring everything to Utah because we want our brands in our backyard.”