Elite Restaurant Group buying spree continues with Patxi’s purchase

Elite Restaurant Group, the owner of Slater’s 50/50 and Daphne’s, is adding deep-dish pizza to its fast-growing portfolio.

Mike Nakhleh, president of the Los Angeles-based company, said he has purchased the 17-unit Patxi’s Pizza from private-equity firm KarpReilly LLC. Terms of the deal were not disclosed. The acquisition, expected to close in 60 to 90 days, is the second for Elite in less than six months.

When the deal is complete, Elite’s portfolio will increase to 50 restaurants with total revenue of about $100 million, Nakhleh said.

More than two years ago, Elite began its buying spree with the purchase of the bacon-centric burger brand, Slater’s 50/50 in Southern California. In April, Elite agreed to purchase Daphne’s California Greek.

Since closing the Daphne’s deal in recent weeks, Nakhleh said he’s positioning the 22-unit fast-casual chain for major growth.

He stripped “California Greek” from its name, revamped its look and menu and introduced Daphne’s-branded gyro kits at 90 Costco locations on the West Coast.

Four new corporate Daphne’s restaurants in Southern California are under construction, including a closed San Diego-area restaurant that is reopening in a new location in Mission Valley, Calif.

Nakhleh, a former Sizzler and Fatburger franchisee, said he’s also in talks to buy two other Mediterranean brands. When the proposed mergers close, he said Daphne’s “will double in size over the next six months” as he plans to rebrand those concepts as Daphne’s. 

He declined to name the other two chains.

Nakhleh said he was attracted to Patxi’s, founded in 2004 in Palo Alto, Calif., because its culture is similar to Daphne’s and Slater’s.

“We are excited to add pizza to the portfolio,” Nakhleh told Nation’s Restaurant News in an exclusive phone interview. “Everything I’ve been acquiring is everything I believe in and love.”

A majority of Patxi’s full service restaurants are in California. The brand also has locations in Seattle and Colorado.

Elite plans to revamp the chain’s menu and design as it plans to open about 10 new units a year.  

By comparison, Elite has grown Slater’s 50/50 from six units to 11 since he opened the first franchise restaurant in Dallas in June 2017.

The most recent location opened this week in Texas with a second location in Dallas. A 12th location is projected to open by the end of the year in Riverside, Calif. Elite also launched the Slater’s branded food truck this week.

The truck is available for private events, and when it’s not booked it will “be out on the streets five days a week in different cities,” Nakhleh said.

The full-service burger and craft beer restaurant, founded by Scott Slater in 2009, is known for its signature burgers that are half ground beef and half ground bacon. Bacon also shows up in multiple dishes and beverages from cocktails to macaroni and cheese. Slater grew the company too quickly and, in some instances, chose poor real estate locations with low visibility.

Slater sold the company to Nakhleh, who fell in love with concept after eating a burger at the Rancho Cucamonga, Calif. restaurant. Slater no longer owns a stake in the company. He remains the brand’s chief ambassador and holds the title “Baron of Bacon.”

Like Daphne’s, the Slater’s brand has expanded into the retail sector.

Elite has partnered with a San Diego meat supplier, which is selling Slater’s 50/50 frozen patties at Sam’s Club warehouses across the U.S.

Nakhleh said Elite will grow each brand through franchising but with a twist.

“For all our brands the plan is to open corporate locations, hold them for 6 months then sell them as turnkey franchise locations,” he said.

This business model ensures the restaurants are being built properly and running smoothly before Elite hands over the keys.  As a former franchisee, Nakhleh believes this approach takes away the scary “unknowns and headaches of opening a new location from scratch.”

“We want to grow, but want to grow responsibly,” he said.

Contact Nancy Luna at [email protected] 

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