Just a few short weeks ago, we learned that Whataburger had retained the services of investment firm Morgan Stanley, in order to more fully explore the company’s options in the event of a possible sale. The company’s statement about the move was noncommittal, framed as part of the regular course of business—they often evaluate potential investors, and planned to continue to do so, and this was just more of that.
Three weeks later, though, those options have been explored, and Whataburger is a Texas-owned chain no more. BDT Capital Partners, a Chicago-based investment firm, has acquired a majority stake in the company. While the current plans involve keeping the company’s headquarters in San Antonio, there are an awful lot of questions about what the future of the orange-and-white stripes will look like. Chief among them: What are BDT’s plans for expansion?
Merchant banks and holding banks are a fairly opaque world. Want to visit BDT’s website to get a better sense of what else they own? You’re out of luck—they don’t have one. The Chicago-based company was founded by former Goldman Sachs executive Byron Trott, which sounds like a name straight out of a Vonnegut novel. Trott launched BDT in 2009, and the web of companies in which it owns some stake is a large one. BDT owns minority stakes in a number of businesses that have been acquired by the Luxembourg-based JAB Holding Company, many of which have names familiar to anyone who’s ever eaten breakfast at a strip mall: Peet’s Coffee, Einstein Bros. Bagels, Krispy Kreme, Panera Bread, Au Bon Pain. The company also owns Keurig Dr Pepper, which is the conglomerate that formed a year and a half ago after a different iconic Texas brand got acquired by a company headquartered up north. (You may also recall JAB being in the news this past March after the Reimann family that owns it admitted that the roots of its 33 billion Euro fortune stem from its use of slave labor in Nazi Germany.)
In other words, there are a lot of rabbit holes to fall down trying to get a sense of what the new owners of Whataburger have planned. One restaurant in the BDT family worth looking to, if you derive a great deal of pride from your favorite Texas burger chain, is the deep dish chain Lou Malnati’s, from BDT’s hometown of Chicago. The pizza joint got acquired by BDT in 2016, and since then, the company has expanded from 46 Chicagoland locations, plus a few outposts in Arizona, to … 56 Chicago-area locations, plus three more in Phoenix and Scottsdale. That ain’t bad, and if it signals that BDT and Whataburger have a similar plan for controlled, sustained growth that keeps quality high and prices affordable, then it doesn’t really matter who the owners are.
It’s unlikely that the immediate future of Whataburger involves serving Wrigley Field hot dogs at the drive-thru, or for Whataburger to flood the Chicagoland region with orange-and-white striped entry points to burger nirvana—but that’s just a guess, and right now, we just don’t know.