Yum! Brands Finalizes Strategic Entry into Fast-Casual Dining Through The Habit Burger Grill Acquisition

A landmark deal reshapes the restaurant giant’s portfolio while clarifying who owns The Habit Burger Grill

The acquisition of The Habit Burger Grill by Yum! Brands represents a watershed moment for the Louisville-based restaurant conglomerate. With stockholder approval now secured, Yum! has officially completed its $375 million cash purchase of the California-born burger concept at $14 per share—marking a decisive pivot into the fast-casual segment and fundamentally answering the question of who owns The Habit Burger Grill today.

A Strategic Expansion Into Premium Quick Service

Yum! Brands, the global powerhouse operating KFC, Pizza Hut, and Taco Bell across more than 50,000 locations worldwide, now extends its reach into fast-casual dining with this acquisition. The move breaks new ground for a company traditionally anchored in quick-service restaurant formats, signaling management’s confidence in The Habit Burger Grill’s growth trajectory and market positioning.

The transaction was financed through existing cash reserves and available credit facilities, demonstrating Yum!'s financial flexibility. According to company projections, the acquisition is expected to have minimal earnings-per-share impact in 2020, with accretion anticipated beginning in 2021 and accelerating thereafter.

Understanding The Habit Burger Grill’s Appeal

Founded in Santa Barbara, California in 1969, The Habit has evolved into a distinctive culinary concept that bridges the premium quality and hospitality of full-service dining with the value proposition and speed of quick-service formats. The brand operates nearly 300 locations spanning 13 U.S. states plus China, each featuring a signature open-flame chargrilling methodology.

The menu centers on made-to-order charburgers crafted with USDA Choice tri-tip steak, hand-marinated and hand-filleted chargrilled chicken sandwiches, and sushi-grade chargrilled ahi tuna preparations. Complementing these proteins are fresh salads, artisanal sides, and handmade frozen confections—all emphasizing fresh ingredients and precise preparation.

The brand’s operational design prioritizes a welcoming in-store environment through contemporary restaurant architecture featuring open kitchens, outdoor patios, and natural materials. This aesthetic approach has supported a balanced daypart split of approximately 50 percent lunch and 50 percent dinner traffic.

The Financial Foundation: Strong Unit Economics

The Habit’s growth metrics provided compelling justification for the acquisition price. Over a ten-year span, average unit volumes (AUVs) for company-operated restaurants expanded from approximately $1.2 million in fiscal 2009 to approximately $1.9 million in fiscal 2019—a 53.9 percent increase. During the identical period, unit count surged from just 26 locations to 271, alongside international expansion into China, yielding a compound annual growth rate of 26.4 percent.

This economic resilience, combined with demonstrated scalability, positioned The Habit as an unusually attractive platform for Yum! Brands’ franchising infrastructure and purchasing leverage.

Integration and Operational Independence

Under current arrangements, The Habit Burger Grill maintains its headquarters in Irvine, California and continues as an independently operated brand under the Yum! Brands umbrella—similar to how KFC, Pizza Hut, and Taco Bell maintain distinct identities despite common ownership.

Russell Bendel, who assumed the CEO role at The Habit, and Chief Financial Officer Ira Fils retain operational leadership, with Bendel reporting directly to David Gibbs, Yum! Brands’ Chief Executive. This leadership continuity aims to preserve brand authenticity while leveraging Yum!'s infrastructure for distribution, franchise recruitment, and vendor negotiations.

Market Recognition and Consumer Perception

The Habit earned recognition as Best Regional Fast Food in USA Today’s 2019 Best Readers’ Choice Awards—a consumer endorsement underscoring its positioning within the competitive fast-casual landscape. The brand’s emphasis on ingredient quality and preparation craft has cultivated a dedicated customer base that informed Yum!'s strategic rationale.

Strategic Rationale and Growth Potential

Industry observers note that Yum! Brands identified in The Habit Burger Grill a rare combination of premium product quality and accessible pricing—precisely the positioning sought by today’s consumers navigating the gap between fine dining and conventional quick-service formats. The acquisition signals Yum!'s conviction that additional growth runways exist both domestically, particularly across untapped U.S. markets, and internationally beyond the current China presence.

The integration of The Habit into Yum!'s ecosystem of KFC, Pizza Hut, and Taco Bell presents opportunities for co-development of franchise territories, consolidated procurement arrangements, and shared operational best practices—advantages unavailable to the brand operating independently.

By bringing The Habit Burger Grill into its corporate family, Yum! Brands has clarity on who owns and operates the concept while maintaining the brand autonomy that has preserved its California-inspired identity and customer loyalty through nearly five decades of operation.