Buyer has big plans for Johnny Rockets

Times Staff Writer

The Johnny Rockets chain of ‘50s-themed diners launched on Melrose Avenue is ready to blast off, its new owner vows, with plans to add nearly four times as many locations in five years.

Smaller versions of the burger-and-fries restaurants will start touching down in airports, shopping malls and other areas as part of an aggressive expansion by Washington Redskins owner Daniel M. Snyder, whose private equity firm, RedZone Capital, acquired the Lake Forest-based chain Friday for an undisclosed amount.

“There’s no reason we shouldn’t see 1,000 Johnny Rockets locations within the next five years,” Snyder said in a statement. The privately held Johnny Rockets has 202 locations in 28 states, Puerto Rico and seven foreign countries. Its annual revenue is $250 million.

Johnny Rockets was started by Ronn Teitelbaum, who after a successful career selling high-end men’s clothing decided to re-create the malt shops of his youth.


He opened his first retro diner in 1986, with a menu that included hamburgers, milkshakes, cherry Cokes and apple pie. When certain songs played on the jukeboxes, waiters and waitresses started dancing.

Within a year, he had opened diners in Westwood, Sherman Oaks and Beverly Hills. Teitelbaum died in 2000. The company was sold to Snyder’s firm by Centre Partners Management, Apax Partners Inc. and members of Teitelbaum’s family.

The chain has been growing about 20% annually and is already well-known because of some high-profile locations, including Knott’s Berry Farm, the Atlantis resort in the Bahamas and aboard seven Royal Caribbean cruise ships, Chief Executive Mike Shumsky said.

“Everyone tells me that the brand is bigger than the number of restaurants we have,” he said. “Our challenge has been to fill the shoes we’ve already built for our brand.”

One of RedZone’s first steps will be to open Johnny Rockets Express restaurants in airports, malls, stadiums and theme parks. Snyder is also chairman of theme park operator Six Flags Inc., and his connections in sports and entertainment will help the restaurant chain’s expansion, Shumsky said.

But Snyder’s five-year growth plan will be difficult to meet, said Dennis Lombardi, executive vice president of foodservice strategies for WD Partners, a restaurant development firm.

“Johnny Rockets has a great entertainment theme and it’s got a nice niche ... that appeals to certain occasions, certain times, and other times it doesn’t work,” Lombardi said.

RedZone was started in 2004 by Snyder and Virginia home builder Dwight C. Schar, who also is an investor in the Redskins football team. The firm said it specialized in “under-marketed companies.”


RedZone’s first major investment was a stake in Six Flags, owner of the Magic Mountain theme park in Valencia. Snyder won a proxy battle in 2005 that led to the ouster of Six Flags’ management and installed former ESPN executive Mark Shapiro as chief executive. Shapiro has focused on making the company’s parks more family friendly. One of Six Flags’ directors, Mark E. Jennings, has served as a Johnny Rockets director.

Snyder and Schar, chairman of NVR Inc., last fall formed a limited partnership, RedZone Capital Fund II, that seeks to raise $750 million, according to a Securities and Exchange Commission filing. Johnny Rockets is the fund’s first investment.