Frisch’s new owner: favorites to stay, Pepsi in review

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Frisch’s Restaurants will keep serving its signature Big Boy hamburgers with tartar sauce, and hot fudge cakes, and will review its Pepsi contract, the company’s new owner says.

Aziz Hashim, the founder of NRD Capital Partners that bought Frisch’s on Tuesday for $175 million, says his recipe for growing the iconic restaurant chain is nurturing what made it a beloved local brand – and then franchising new Big Boys in underdeveloped markets.

“We have tremendous respect for our customers’ loyalty and we want to make the Frisch’s brand even better for them,” Hashim said, adding his Atlanta-based investment fund is beginning to study operations and customers’ preferences to improve the menu and maximize sales.

Early interaction with wait staff and customers has the new ownership is mulling offering appetizers, Hashim said. NRD will also review Frisch’s seven-year contract with Pepsi and see if it’s possible and worth it to switch back to Coke products.

“We’ll look at the contract and see what our obligations are and what our customers want,” Hashim said.

The biggest change ahead is to the company’s growth strategy. Hashim wants to switch from mostly corporate-owned eateries to expanding through more franchised locations. Frisch’s owns and operates 95 Big Boys in Ohio, Kentucky and Indiana, while it franchises 24 other locations.

“By the end of 2016, I’d like to see four to six new units,” Hashim said, adding the company should expand in Indiana and Tennessee. Ramping up store growth will take some time, as the company has to scout both potential new franchisees and real estate.

“Franchising is our growth vehicle,” Hashim said.

Other changes have already occurred: to finance the acquisition, an undisclosed number of Big Boy properties have been sold, but leased back to Frisch’s.

Hashim said he doesn’t expect to cut jobs and will add them as needed. He said Frisch’s already closed underperforming stores in recent years to make it a more attractive acquisition target and doesn’t foresee further closures.

Also, as Frisch’s quietly shopped itself for sale, the company trimmed in recent years less popular menu items, such as liver and onions, to lower costs and boost efficiency.

NRD’s acquisition of Frisch’s Big Boy takes Hashim, 48, full circle.

He grew up in Los Angeles where his favorite sandwich was the Double Decker hamburger at Bob’s Big Boy.

“Big Boy was where my mom took me as a kid for a treat,” Hashim said.

Hashim began his 30-plus year career in restaurants working his way through high school and college at Burger King. But after earning his degree from the University of California at Irvine and landing a job as an engineer, he abandoned his cubicle after only three months to return to the bustle of the kitchen.

He moved to Atlanta in 1996, to open a KFC franchise. In the coming years, he opened 80 restaurants under multiple franchises including Domino’s Pizza, Popeyes, Checkers, Rally’s and more.

In 2014, Hashim decided to take his career to the next level and founded his fund to invest in restaurants with options to franchise.

“I started my first job at $3.15 an hour and now, I just bought Frisch’s,” Hashim said. “Franchising has allowed me to achieve the American dream.... Franchising is the best of American ingenuity where you’re in business for yourself, but not by yourself.”

Frisch’s is NRD’s first acquisition.

Paying $34 cash for Frisch’s outstanding stock, NRD Partners bet big that it could step up Big Boy’s growth. The company paid a 21 percent premium for Frisch’s stock that closed at $28.12 the day before the takeover was announced.

Frisch’s was valued less by Wall Street than other restaurant peers because of its slow growth.

Through the decades, Frisch’s Restaurants tried numerous other ventures to augment its Big Boy eateries. Its last side venture was a disastrous chain of 35 Golden Corral buffet restaurants that it spent $106.9 million building. Frisch’s then sold off the stores for $49.8 million in 2012 after they failed to generate enough profit.