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Nazca runs the risk of falling short with Taberna del Volapié

Teresa Sánchez

Growth that is too fast, disorderly, and with no capacity for financial control or management. That’s the main risk that private equity firm Nazca Capital runs, after reaching an agreement in March with a group of executives to create FoodBox, a multi-brand catering platform that has acquired restaurant chains Taberna de Volapié and Catalan group Europastry's cafés and bakeries in one fell swoop.

This platform is being chaired by Carlos Pérez Tenorio, former managing director of Restalia, who was appointed executive director of America for that company in 2013 and, therefore, was primarily responsible for the failure of 100 Montaditos in the US. Pérez Tenorio is joined by two former executives from Burger King, Augusto Méndez de Lugo as managing director, and Raimundo Jiménez Alba as CFO who, like him, have the same objective: to acquire and integrate chains as quickly as possible with a view to expanding at lightning speed.

Europastry is one of the leading groups in the bakery-café segment, with around 50 locals, under the brands SantaGloria, El Molí Vell and L'Obrador. Since the franchise model was launched at the end of 2013, the company has experienced a sharp acceleration in the rate of new openings.

And something similar is happening with Taberna de Volapié, created by Jerez entrepreneur Ángel María Gutiérrez and his nephew, Javier Guitiérrez. After signing a contract with Heineken last year, an ambitious growth plan was rolled out, opening 38 locales, 14 of which became operational in the last twelve months. Pérez Tenorio's objective at the helm of both chains is to have more than 350 locales in at most 5 years, with an investment of more than 60 million euros and a clear focus on the franchise model, while still maintaining existing cafés and shops.

In practice, that would mean almost quadrupling the current network of a company, FoodBox, which was founded with initial capital of just 60,000 euros and is expected to obtain barely 35 million euros in revenue this year. If everything goes as planned, operating income will amount to less than 3 million euros, and it has a very small structure, with just 16 employees.

Carlos Pérez Tenorio could very well make the same mistake twice. In 2003, after having worked in broadcast journalism with Radio Algeciras (Cadena SER) and the shopping mall sector, he joined Restalia, when it was just starting out.

As managing director, he put in place an ambitious growth plan, opening 400 establishments under the 100 Montaditos and La Sureña brands in a very short time. That was when the problems began. In 2013, the company appointed him executive director, responsible for growth in America. The New York Times even called the company "The Zara of sandwiches".

"Other brands, like McDonald's and Subway, were unable to open more than 300 restaurants in their first ten years, like we have done in Spain", said Pérez Tenorio at the time, barely two years ago, when he announced his plans of opening between 2,000 and 4,000 restaurants, as franchises, in the US alone.

"Any franchise brand from an organized catering company that aims to expand in the US has a numeric variable from others' experience, which is between 2,000 and 4,000 restaurants. We believe that, given our potential, our project will align with those figures", he said optimistically. But that couldn't have been further from the truth. Pérez Tenorio was wrong. Restalia was not able to make its investment profitable and, as it was unable to generate enough cash to continue funding its plans, it declared bankruptcy in the US. As a result, the company decided to remove him from his post barely one year later, and in 2014, they revoked his management powers and named him head of institutional relations, putting the brakes on the project. But it was too late. All of his plans had been for naught.

Now Nazca Capital believes in both him and in a growth project in which volume takes precedence over everything else. As with Restalia, Pérez Tenorio aims to become large enough so as to hold all the cards when negotiating with suppliers, assuming he's able to maintain the support of Heineken.

To that end, he assumes two large risks: first, volume does not guarantee profitability, and second, if franchisees are under too much pressure, as was the case with 100 Montaditos, he could find himself in a mess similar to the one he created at Restalia, where an increasing number of franchisees see no choice but to jump ship. He'll also have to carefully review his price strategy. Restalia was specialized in keeping costs low so as to obtain high revenues and attract new franchisees; however, the model at Taberna de Volapié and the former Europastry cafés and bakeries is completely different, as they are positioned in a much higher segment and seek to attract customers with greater purchasing power. FoodBox could very well end up like Restalia's venture in the US, a tale of failed dreams of wealth and fame.

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