Founded in 1964, Huddle House has about 270 locations in 21 states. It is owned by Ascent Hospitality,
WE Food Enterprises Hospitality Group laid out some Texas-sized development plans as it prepares to expand a 60-year-old restaurant brand.
The Houston-based restaurant group inked a deal with Huddle House to open 20 units in Texas. It’s the group’s first franchise venture and is the largest-ever agreement for Huddle House. The all-day breakfast casual dining chain has about 270 locations in 21 states. Owned by Ascent Hospitality, it’s ranked No. 234 on the Franchise Times Top 400 with $219 million in sales in 2023, a dip of 0.5 percent from 2022.
“Our initial deal with Huddle House is for 20 units. Our goal is to eventually take over the Texas market and do 100 locations throughout the state with a five-to-10-year plan,” said Justin Criswell, financial executive and chief information officer of WE Foods.
Criswell said the plan is to open the first Huddle House in Spring, Texas, in June, with three additional openings planned for the surrounding Houston suburbs soon after. He said WE Foods, which was founded by Brandon Washington, is also interested in opening non-traditional locations on college campuses and perhaps hospitals. Huddle House has 17 franchise locations in Texas.
Justin Criswell is the chief information officer for Houston-based WE Food Enterprises Hospitality Group.
Criswell pointed out that although Washington is new to franchising, he gained experience owning a barbecue restaurant. Criswell said the executive team of WE Foods, which was formed three years ago, also assembled those with extensive marketing experience and good real estate connections in the Houston market that will help the group navigate the challenges of opening and operating successful restaurants.
Through due diligence and positive meetings with the brand’s leadership, Criswell said Huddle House stood out as WE Foods evaluated opportunities.
“We reviewed several candidates and, in the end, decided to partner with Huddle House because we were definitely interested in the brunch concept and also, they were willing to give us an exclusive deal, or first right of refusal deal, for a location in Houston,” said Criswell. “They also believed in our vision and plan that we put in place.
“The thing that sealed the deal for us was how Huddle House really supports and backs our military and armed forces and the fact that Huddle House was open to our ideas for making some small tweaks to the menu and advancing it without reinventing the wheel.”
Like other legacy brands in the casual dining space, Huddle House changed hands a number of times since its founding by John Sparks in 1964. Allied Capital and Ares Capital both owned it before Sentinel Capital Partners purchased it in 2012. Sentinel then sold the company to Elysium Management in 2018, where it was eventually placed under Ascent Hospitality Management. Elysium manages investments for the family office of Apollo Global Management co-founder Leon Black.
In 2019, Huddle House acquired Perkins out of bankruptcy, adding it to Ascent Hospitality. James O’Reilly took over as CEO of Huddle House in 2023 and is also Ascent’s chief executive.
Both Huddle House’s franchisee base and its total store count have fallen in recent years. The brand’s total unit count dropped from 313 at the start of 2021 to 272 stores at the end of 2023.
The cost to open a new Huddle House ranges from $551,950 to $1,429,150 when leasing the land and building and purchasing the equipment and signs. The average unit volume for restaurants in 2023 was $818,053, according to the company’s franchise disclosure document. By comparison, Denny’s, one of the largest diner and breakfast chains, has average sales just below $1.9 million.
“Here in Houston, comfort food, specifically the brunch menu, is booming right now,” Criswell said. “The issue is, it’s still kind of a niche market here, and it’s hard to find places to eat with that brunch atmosphere and quality food without the long lines. We want to get into the communities with our restaurants and offer the people what they want.
“We feel like we can definitely capitalize on that target market,” he said.