Investors Buy Shari’s, Mull Opening Restaurants in O.C.

An investment group headed by Anaheim-based Fairmont Capital Inc. has purchased Shari’s Management Corp., a chain of 96 family-style restaurants, for about $60 million.

Fairmont’s president, Michael Gibbons, said he’s had his eye on the chain since he helped former owner Larry Hatfield negotiate a deal to buy the Beaverton, Ore.,-based operation 10 years ago.

“We sort of had a gentlemen’s agreement that when he was ready to retire, I would have first dibs at buying it,” Gibbons said. “And he kept his word.”

The restaurants, which had sales of about $128 million last year, are identifiable partly by their six-sided design. Their menu includes options such as hamburgers, chicken-fried steaks and chocolate shakes. The average check is $6, Gibbons said.

Customers are so loyal, he added, that 42% of them eat at Shari’s at least once a week.

Fairmont has invested in a variety of ventures over the years, from Krause’s Sofa Factory to Denny’s Inc.

The investment group, comprised of Fairmont and the chain’s senior managers, intends to open more eateries. “Our strategy is to add from 10 to 15 new restaurants per year to our existing base of 96. We may even acquire a few smaller chains as part of our growth plan,” Chief Operating Officer Larry Curtis said in a statement.

The idea is to open more restaurants in states where Shari’s already is in business and then to move into new territory, Gibbons said. There are two of the coffee shops in Northern California.

Gibbons said the company may eventually open some Shari’s in Orange County, but the competition here is tough and it would be difficult to try to open one restaurant at a time.

“A lot of it is a function of whether you can get the real estate,” he said. “If the right acquisition came up in the L.A. or Orange County marketplace, we’d certainly look at it.”