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Second Cup Expansion to See Nearly 100 New Locations Open Over 36 Months After Foodtastic Acquisition

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Montreal-based Foodtastic, a franchisor of multiple restaurant concepts, is buying the specialty coffee brand Second Cup Coffee, with aggressive plans for expansion in the coming years across the country.

“Second Cup has been a Canadian staple for almost 45 years and we’re excited to welcome them into the Foodtastic family,” said Peter Mammas, President and CEO of Foodtastic.

Peter Mammas

“We look forward to working with all our new franchisees and emerging through this pandemic with a revitalized Canadian leader in the premium coffee segment. This acquisition is consistent with our strategy of acquiring quality Canadian brands with growth potential.”

Foodtastic is buying the brand from Aegis Brands Inc. The official closing of that deal is in early April.

Foodtastic started in 2012 with the first Beauty and the Beef burger bar concept. It is the franchisor of multiple restaurant concepts — 16 of them —  including Au Coq, La Belle et La Boeuf, Monza, Carlos & Pepe’s, Souvlaki Bar, Nickels, Rotisseries Benny, Chocolato, Big Rig, and Bacaro. Foodtastic is a leader in the restaurant franchising business with over 130 restaurants and $240 million in annualized sales.

Lawrence Mammas, Chief Development Officer and a founding partner in Foodtastic, said there are currently 211 Second Cup locations across Canada.

Lawrence and Peter Mammas have been in the restaurant business since their youth. In 1990, Lawrence came up with a concept called Nickels Deli with a local Quebec singer, who is now an international diva, Celine Dion. Together with Dion and her husband, René Angélil, and his cousin Paul Sara, the Mammas brothers started Nickels “and that’s how we got into the franchise game,” added Lawrence.

Beauty and the Beef started in 2012 with another partner, Jack Gaspo. Then they started Souvlaki Bar and then it purchased Carlos & Pepe’s and continued its expansion. In late 2018, they signed a partnership with Oaktree Capital, an investment firm out of the U.S., to help it continue its expansion and they acquired several brands. In January 2020, Gaspo was bought out and the company is currently owned by the Mammas brothers and Oaktree Capital.

Lawrence said in 2018 Oaktree Capital initially invested $47 million and it was recently announced it was investing another $50 million.

“Second Cup fell in our strategy of being a diversified restaurant company and having brands to appeal in different segments. So we did not have anything to do with any kind of coffee chain. We knew that Second Cup was possibly available and we looked at it and said this is a brand that’s been around since 1975. They have coffee. It’s a Canadian brand. We would be very proud to own it being Canadian ourselves and we wanted to keep it Canadian and not allow some American company to come and grab it,” he said.

“Our expertise is we’re very, very strong in our food component. So we hope to bring a new offering on the food side to draw more clients into Second Cup. They already have a great, great coffee.

“Our game plan is to basically tweak operations, bring a new twist to the food offering and our goal is to surpass 300 units in the next 36 months. We want to grow out West. We want to grow in the Maritimes, Quebec, and wherever we can in Ontario.”

Tony Flanz of Think Retail represents Foodtastic and is negotiating leases for Second Cup.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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