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Burgerville, the iconic Northwest fast-food chain, said it’s selling a chunk of the business to a group of local investors that includes former Dutch Bros chief executive Joth Ricci and its own CEO, Ed Casey.
The deal is expected to close Monday, Burgerville said.
The announcement comes four days after WW reported that Burgerville late last year had cut a deal to sell itself to a group led by Sortis Capital, a Portland firm that has been investing in struggling chains. WW cited a 30-page document describing the deal that was dated December 2023.
Both Burgerville and Sortis denied that any deal had been signed and declined to say more.
In its release today, Burgerville didn’t mention Sortis, which has made headlines because some of its investments appear to be struggling. Sortis Holdings, an affiliate of Sortis Capital, has held stakes in Bamboo Sushi, Blue Star Donuts, Water Avenue Coffee, Rudy’s Barbershops, the restaurants Ava Gene’s and Tusk, and Sizzle Pie.
Lawsuits and demands from unpaid creditors suggest a cash crunch. Sizzle Pie has missed rent payments at its Concordia location, according to a lawsuit filed by the landlord, as has See See Motor Coffee Co. on Sandy Boulevard, according to an eviction complaint. In November, Sortis Holdings announced layoffs after a deal to purchase the Ace Hotel chain for $85 million collapsed.
Sortis Capital won’t become an investor in Burgerville, a Sortis spokesman said, but Sortis founder Paul Brenneke will be. That’s a change from December, when the deal document said that Sortis Capital had “reached an agreement” to acquire the chain.
Hannah Smith, an outside spokeswoman for Burgerville at Gard Communications, declined to answer any questions about the deal or about Burgerville.
“Thank you for your interest,” Smith said in an email. “Burgerville is not granting interviews at this time.”
In an interview with the Portland Business Journal, Ricci, the former Dutch Bros CEO, said that Brenneke has “been tremendously helpful in putting this together. But he will not be involved in running any of the business. He’s not on the board. Not his thing. That’s why you’re talking to me.”
In an interview with The Oregonian, Ricci called Burgerville “a sleeping giant.”
Also in an interview with The Oregonian, Casey, the current Burgerville CEO, said, “No single person or entity has a big, controlling interest.” And, “We get constant requests to come to Bend, to come to Salem, to come to Eugene.”
In the deal described in the December documents, a Sortis affiliate was slated to contribute 10 Sonic fast food restaurants, which were to be turned into Burgervilles by the third quarter of next year. By 2028, Sortis Capital planned to have 73 Burgerville restaurants, up from 39 today. Revenue was projected to rise to $214 million by 2028, up from $92.1 million in 2022.
In today’s release, Burgerville said it will open its 40th restaurant this year, in Wilsonville. It says it plans to open restaurants in Salem and Keizer, “followed by expansion north and east of its store in Centralia, Washington. The chain has at least six more restaurants and as many as 10 planned over the next year in the Pacific Northwest.”