Former McDonald’s Franchisees Buy Zaxby’s Restaurants, Plot Texas Expansion | Franchise Mergers and Acquisitions

Three Zaxby’s restaurants in Texas are under new ownership and more development is on the way as Jonathan Ellis and his father, Brian, look to extend the chicken brand’s presence in the Dallas-Fort Worth area.

The Ellises acquired units in Keller, Mansfield and Richardson from seller Mike Cummings, who still owns locations in Utah, and signed a six-unit development deal to open Zaxby’s stores in Tarrant County. The family has restaurant roots in McDonald’s, as Jonathan Ellis’ grandfather,  Rodgers Ellis, opened in 1969 what was just the fourth McDonald’s in Texas. At one time the Ellis family owned 81 McDonald’s stores, and Jonathan Ellis managed 19 restaurants for BG Foods Inc. until 2018 when the family sold its units.

“We view this as a very big opportunity to come in as former McDonald’s operators to reintroduce ourselves to the Texas market,” said Ellis, who is also a former Sylvan Learning franchisee and with his wife, Sarah, founded and is franchising eyelash extension concept Honest Lash.

The three existing stores, the only Zaxby’s restaurants in the Dallas metro, are “in need of some TLC,” noted Ellis, and the plan is to “install some more operationally sound strategies” in addition to investing in the look and feel of the restaurants. “We’ve been doing food our entire lives. We know what we’re doing, we know how to make money.”

Jonathan Ellis family

Jonathan Ellis, pictured far right with his family, is working with his dad to develop new Zaxby’s restaurants in Texas after acquiring three stores.

Texas is a “pioneer market” for Zaxby’s—the Athens, Georgia-based company has about 20 locations elsewhere in the state, near San Antonio and Houston—continued Ellis, and while fellow chicken-focused chains such as Raising Cane’s and Chick-fil-A have a strong presence, he believes there’s plenty of room for another concept.

Co-founded in 1990 by Zach McLeroy, who stepped down as CEO and became chairman of Zaxby’s in 2022 following the sale to the Goldman Sachs Merchant Banking Division, Zaxby’s has more than 900 locations and is accelerating franchise development. “The founder-led vision has been passed on to an organization with deep pockets ready to take Zaxby’s to the next level,” said Ellis. “We’re excited they’re a regional player with national aspirations.”

Zaxby’s is on track to open 34 new restaurants this year, Chief Development Mike Mettler told Franchise Times in August, double what it did in 2022. His aim is to “unlock growth potential” with existing franchisees and use “aggressive development incentives” to spur expansion. Introduced via an incentive program this year, Zaxby’s will refund the initial franchise fee of $35,000 and reduce the royalty to 2 percent for the first year and 4 percent for the second year on stores opened before December 25.

Related: Zaxby’s Franchisee Drives Growth by Developing Leaders Amid Brand Expansion Push

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