Meanwhile, TSG Consumer Partners is ever watchful for high-growth companies to invest in. The recognized leader in building and investing in high-growth companies since 1987, TSG knows how to tap into a good business investment. And so, it offered to buy shares of Yard House, leveraging TSG’s 2 decades of experience in building some of America’s most trusted brands. Thus, a merger was born.
Acquiring a 70-percent interest in Yard House, TSG enthusiastically lauded the Yard House team’s success and announced that there will be no changes in its management.
TSG Managing Director Hadley Mullin said, “Founder and CEO Steele Platt and his team have developed a successful and exciting concept in the restaurant field. They have grown Yard House at a compounded rate of over 30% per year over the past five years, and we are highly enthusiastic about the Company’s future growth prospects.”
Platt is equally excited about the new partnership. “I believe that TSG will be an ideal strategic partner for Yard House. TSG will assist us in growing and building the brand as we continue to move forward,” said Platt. “We are very excited about beginning this next chapter in Yard House’s evolution and making it a national brand. My executive management team and I continue to own a meaningful portion of the company, and we will remain actively involved in the growth of the business for many years to come.”
The concept of Yard House came from Platt who opened a restaurant called “Boiler Room” in Denver, Colorado offering a wide selection of beers. After several years, Platt sold his restaurant and moved to San Diego, California. There, he spied a deserted warehouse building in the waterfront in Shoreline Village in Long Beach Yard. He decided to put up another upscale pub and eatery in that spot, using his original concept. One of the smartest moves Platt made was forming a partnership with Harald Herrmann and giving him carte blanche to run the restaurant his way. Herrmann in turn signed up Carlito Jocson who had worked with him in Chez Panache and made him executive chef.
From the trio’s combined efforts came Yard House, an upscale-casual eatery that can serve up to two hundred different kinds of beer on tap and a menu of eclectic gourmet food. Yard House’s name is derived from the time of the “Wild, Wild West” when stagecoach drivers only had a quick minute to get a cooling drink before hitting the trail once again. A “yard of ale”, which is a three -foot drinking glass, was handed to the drivers without having them getting off their mounts.
Yard House launched its first restaurant in 1996 in Long Beach with the largest selection of draft beers people have seen; as much as 250 tap handles – when other beer pubs were struggling to produce a dozen kinds. The beer attracted the crowd but the 100-plus mouth-watering dishes on the menu kept the people coming back for more and more. Yard House soon gained a huge following for its upscale-style fusion cuisine, classic-rock soundtrack and of course, its self-proclaimed offering of the world’s largest selection of draft beers.
Over the last 12 years, Yard House expanded exponentially. Now with 20 restaurants and 5 more in the works, the chain has restaurants in Long Beach, Costa Mesa, Irvine, Rancho Mirage, San Diego, Pasadena, Rancho Cucamonga, Riverside, Newport Beach, and Brea, all in California; in Colorado; Illinois; Kansas; Phoenix,Arizona; Scottsdale, Arizona; Glendale Arizona; Waikiki, Hawaii; Las Vegas, Nevada; and Palm Beach Gardens, Florida.
With an average unit volume of $8.5 million per store and cumulatively estimated at close to $200 million annually in sales, Yard House is the recipient of many accolades and awards, including the Hot Concept! award by Nation’s Restaurant News, and the Best Chain Overall Beverage Program as voted by Cheers Magazine. The company was also ranked among the Top 50 Fastest Growing Full Service Chains by Restaurant Hospitality (which also featured the Yard House as a Concept of Tomorrow), and among the Top 100 Independent Grossing Restaurant in the United States according to Restaurants & Institutions Magazine.
Yard House is the first restaurant brand in TSG’s portfolio, whose other food-related investments include Famous Amos, Terra Chips, Garden of Eatin’ snacks, Mauna Loa Macadamia Nuts and Smart Balance. Managing about $1.5 billion in invested capital, TSG, together with partners Platt, Hermann and Jocson, have been developing a short- and long-term strategic growth program to make Yard House a national brand.
“We have as much capital as we need to grow, but our performance will lead our growth,” said Platt. “Yard House could parlay its growth momentum into a billion-dollar company, but it’s not about speed, it’s about doing things the right way, “ he added.
And doing things the right way, they have certainly done. So much so that Chef Jocson disclosed that Yard House is poised to go public with the company within the next five years; which is something smart investors should look forward to. After all, Yard House has proven it’s not only a good place to tap in for fun; it’s a great place to tap into good business, too.