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After 35 years of operating restaurants in central Indiana, Cafe Patachou founder Martha Hoover has a new partner for the pursuit of opening eateries in other places.
Won’t Stop Hospitality Inc., parent company of breakfast and lunch spot Cafe Patachou and five other restaurant concepts, announced Wednesday an investment from Raleigh, North Carolina-based venture capital firm Hargett Hunter Capital Management.
Without disclosing terms of the deal, Hoover said Hargett Hunter is a restaurant-specific private equity firm that will accelerate her goal of out-of-market expansion.
“They believe in quality of product, quality of experience and quality of culture at scale,” Hoover said of Hargett Hunter. “Unlike a vast majority of equity partners, they do not have a compressed time frame. In other words, they don’t want to throw money at it, overdevelop quickly and get out fast. They’re in it for the long term and for the right reasons.”
According to Hargett Hunter’s website, the firm invests “exclusively in emerging restaurant concepts generating a minimum of $10 million of annual revenue where $10 to $50 million of capital can be deployed over time.”
Hoover retains an ownership stake of Won’t Stop Hospitality, which named Oregon-based restaurant executive Michelle Andersen as new CEO as part of the Hargett Hunter investment announcement.
Andersen previously led a seven-state region of operations for Starbucks and she served as CEO of Boise Co-op grocery stores in Idaho.
“She’s well known in the restaurant community, especially in the rarefied world of women in food,” Hoover said of Andersen.
In a written statement, a Hargett Hunter spokesperson said no immediate changes are planned for existing Won’t Stop Hospitality restaurants: “Why ruin what has worked so successfully for the last 35 years? We trust the existing leadership team under Hoover in partnership with Michelle Andersen to properly steward the company forward.”
Hoover said she anticipates the opportunity for new Cafe Patachou locations in Indiana and nearby states.
“My goal is to be able to drive to be at a location,” she said. “There are some natural limitations there, and there is some efficiency. I’m not going to open up a single restaurant in Phoenix and a single restaurant in Tampa and call that my expansion plan. That doesn’t seem to make any logical sense.”
Since 2019, Hargett Hunter has invested in Live.Eat Surf, a California-inspired Mexican restaurant group in North Carolina; Cajun Steamer, a seafood restaurant group in Alabama; Marugame Udon, a fast-casual Asian restaurant group with locations in California and Hawaii; and Trudy’s, a Tex-Mex restaurant in Austin, Texas.
Hoover opened the original Cafe Patachou in 1989 near the intersection of 49th and Pennsylvania streets. The eighth Cafe Patachou location is expected to open later this year in the Nickel Plate District of Fishers.
The roster of Won’t Stop Hospitality restaurants includes Petite Chou Bistro & Champagne Bar, Public Greens Urban Kitchen, Napolese Pizzeria and private event space Bar One Fourteen.
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Hoping for the best, but we all know what happens when private equity gets involved. PE wants higher returns->more restaurants-> higher prices->decrease in quality.
You mean its possible for her prices to get even higher?
Well, there goes the rest of their quality and service. ( I hope I’m wrong, but bet I’m not)
What happened to the adult union concept?
Martha has always tried to portray herself as a leading advocate for locally owned, independent restaurants yet you would see her at Ruth’s Chris and other massive chain restaurants all the time. This only confirms what a lot of people have known for years about Martha… there’s a reason she spends so much money on her PR team!
I stopped patronizing her eateries after the second time watching someone scoop Smucker’s jelly from a tub into a tiny side container that they bill as their “house made jam”.
Private equity slowly but surely kills business, but at least Martha can cash in her chips just before it happens.
Look what PE did to Steak n Shake.
Our community has been very fortunate to experience the Cafe Patachou restaurants and sister restaurants for so many years. Martha was a pioneer in offering healthy fresh food options. I trust they will do their best to continue their positive legacy in whichever lucky market they enter.
Martha is a vile and overrated restaurateur.
Damn. All thiks hate. All she did was create a lot of jobs with good food.
Sounds like Martha is cashing out. Can’t blame her, but I don’t see why PE is needed for long term growth of a company that has been around for 30 years? You’ve proven you can grow the business, why give a PE firm equity to do something you’ve already done unless you want out? Again, nothing wrong with what she’s doing, but the communication strategy here seems disingenuous. Just admit you want to get some cash out of the business.
She has had multiple failed concepts and locations so maybe someone else driving the bus isn’t a bad thing.
Cafe Patachou is a pricey offering but delivers what people want, quality food, excellent service with a caring staff, and attractive facilities. Martha has contributed greatly to Indy’s restaurant offerings.
Martha changed the landscape and raised the cafe bar in Indianapolis. The Patachou foundation does amazing work in the inner city using fresh foods as a way to rebuild communities. After 35 years, taking some cash off the table and having a long term vision, for the well being of the company and its employees is what a CEO gets paid to do. It’s hard to understand why a choice in restaurants you dine at makes you a bad person but that’s just a personal view. Yes PE can destroy companies but it’s hard to argue what Birkshire has done for so many companies including keeping leadership in place and expanding reach and growing success.