Quaker Steak & Lube pulls into new Owner
Steve’s breakdown: Quaker Steak & Lube is now part of TravelCenters. We expect the restaurant to be basically the same but now they have some deep pockets to put media dollars behind. Check into it.
WEST LAKE, OH & SHARON, PA: TravelCenters of America LLC operates more than 780 restaurants and other food outlets in convenience stores and truck stops across the country. But don’t expect its new acquisition — casual-dining chain Quaker Steak & Lube — to become just another truck-stop brand.
The Westlake, Ohio-based company plans to operate Quaker Steak just as it is, as a standalone restaurant brand, with just a couple of locations inside TravelCenters truck stops.
“We think the Quaker Steak brand is one that has a committed customer base, relative to the size of the brand itself — 50 locations,” said Tom O’Brien, CEO of TravelCenters of America, or TA. “The brand has done a lot of things right for a lot of years from a positioning standpoint. Its menu has great focus on a few things that it does very well. Our goal is to enhance those things to grow it into a national brand.”
Quaker Steak filed for federal bankruptcy protection in November and was put up for sale after reaching a preliminary agreement with TravelCenters. TA’s ability to purchase Quaker Steak at the initially agreed-upon price suggests that no other bidders were willing to pay more.
O’Brien said in an interview with Nation’s Restaurant News that TA learned Quaker Steak might be for sale as the company was getting ready to build a new travel center with a Quaker Steak in South Carolina. That is to be the first TA with a Quaker Steak location.
But there won’t be many more. TA has identified “maybe two or three” locations where a Quaker Steak could be included. “Our primary focus is not that,” O’Brien said. “We’ve got a great brand. And we’ve got a great team to operate that brand.”
TA operates some of its own brands within the 780 restaurants it operates around the country. That includes names like Iron Skillet and Country Pride. But those brands only operate inside the travel centers. Quaker Steak is the first standalone concept the company will own.
That doesn’t mean TA is afraid to take on the challenge, or is unfamiliar with branching out into new businesses.
“Being in the truck-stop business means that we have to be great at a lot of different things,” O’Brien said. “We developed over a 40-year history an expertise in all these things, from truck repair to convenience stores to fueling operations to hospitality and restaurants.”
In the past, TA has acquired convenience stores that fit the convenience-store portion of that business. While a restaurant chain is different, it has the expertise to oversee a chain.
“Having developed them, it would be a mistake to let the talent we have languish,” O’Brien said. “We have a great group with the TA Restaurant Group. We’re pretty excited to see some of their energy directed toward Quaker Steak & Lube.”
Quaker Steak does seem to fit with TA in that the restaurant chain’s on-the-road focus could slide in nicely with a company of travel centers, although that wasn’t the principal driver of this deal, O’Brien said.
“I do think there will be cross opportunities,” he said. “It’s very likely you’ll find Quaker Steak & Lube sauces in most if not all of our [retail] locations.”
As for the business itself, O’Brien was cautious in describing what he thinks the company needs as it emerges from bankruptcy. But he also said that being part of a more stable financial operation on its own should help the company improve.
“I think their prior financial distress was perhaps distracting,” O’Brien said. “I’m looking forward to the opportunity for our folks and the folks who are now our folks working together, refocusing on a few things.
“But the big benefit is not having to worry about the kind of things you worry about when you’re headed into bankruptcy. The financial stress is off.”