This spring, when restaurants across America were struggling to survive or closing down, business was booming for Neal Aronson’s Sonic. The retro chain of car-hop joints he acquired through Roark Capital in 2018 was perfect for the pandemic. Sales were booming, including a record 30% jump in May. But Paul Brown, CEO of Inspire Brands, the Roark holding company that owns Sonic, wasn’t satisfied. He called Aronson, wanting to shake things up.
Brown wanted to speed up the rollout of a new format for the 67-year-old chain that would reduce its dependence on drive-up stalls to make room for take-out and add covered patios so guests could leave their cars and dine outside under string lights. Never mind that there was no prototype, no proof of the format’s appeal and no way to know if the sudden Covid-19 uptick would last long enough to see it through.
The pair were fiddling with a rare bright spot in an $18 billion (assets under management) portfolio of more than 20 fast-food chains and other franchising businesses that have a retail footprint totaling 39,000 locations. Aronson controls most of the food operations through two holding companies: Inspire Brands, which he cofounded with Brown two years ago and built into the country’s fourth-largest restaurant business with $14.6 billion in systemwide sales that include Sonic, Arby’s, Buffalo Wild Wings and Jimmy John’s; Focus Brands is deep into mall staples including Jamba Juice, Auntie Anne’s and Cinnabon. The two companies, along with a handful of Roark’s nonfood franchises that include fitness studio Orangetheory, Batteries Plus, which sells batteries, cords and light bulbs, and Petco competitor Pet Valu, give Roark a value that Forbes estimates is at least $800 million, with Aronson its majority owner.