Meritage Enters Casual Dining
Meritage has the exclusive Michigan development rights for O’Charley’s, which is regarded as a leader in the casual restaurant segment and currently operates 206 restaurants in 16 states in the Southeast and Midwest.
The local firm will initially develop 15 eateries, which typically feature a free-standing brick building containing 6,790 square feet and seating for 275 customers, including 52 bar seats.
“Having an exclusive O’Charley’s development agreement covering the state of Michigan and a proven management team, we are well positioned to take advantage of this significant opportunity in the casual dining segment,” said Robert Schermer Jr., Meritage’s CEO. “I believe O’Charley’s selected Meritage to roll out its concept in Michigan in part because of their respect for our track record in developing Wendy’s stores.”
On average, Meritage opened a new Wendy’s restaurant every eight weeks for the last four consecutive years, and now operates 48 restaurants, including 37 in which the company owns both the land and the building.
Meritage initiated a private placement offering to raise capital to fund its expansion into the casual dining segment. To date, Meritage has closed on $4.5 million and estimates the total proceeds from its private offering will be $7.5 million, of which approximately $4.8 million will be used to develop O’Charley’s restaurants.
The firm also has a $6.3 million financing commitment from GE Capital Franchise Finance and a new $2.6 million credit line from Standard Federal Bank.
“Meritage is adequately capitalized for the future rollout of O’Charley’s restaurants in Michigan, and it is now a matter of execution, which is where I believe our team is at its best,” Schermer said.