Key Takeaways
- • Columbia Business School's Aamir Rehman, Associate Professor of Professional Practice in the Finance Division, comments in a New York Times story on private equity deals to expand small, beloved restaurants.
- • The partners behind Los Tacos No. 1, the acclaimed New York taqueria, accepted a multimillion-dollar private equity deal to expand the business.
- • Loyal customers responded on social media with complaints that the restaurant had sold out and would decline in quality.
Summary
A Columbia Business School feature, drawing on a New York Times story, examines why private equity deals aimed at scaling up small, well-regarded restaurants are meeting resistance from their core customer base. Aamir Rehman, Associate Professor of Professional Practice in the Faculty of Business Finance Division at Columbia Business School, weighs in on the dynamic.
The case study centers on Los Tacos No. 1, the acclaimed New York taqueria. When its partners accepted a multimillion-dollar private equity investment to expand the business, fans flooded social media with complaints that the business had sold out and would soon decline in quality. The reaction illustrates a recurring tension in restaurant private equity: the attributes that attract investors, including a loyal following and an established brand, are often tied to the small-scale, owner-operated character that customers value and that expansion can dilute.
The source article is brief and does not disclose the deal's exact valuation, the investor's identity, or the planned number of new locations. Readers seeking those terms should consult the original New York Times reporting.
The case study centers on Los Tacos No. 1, the acclaimed New York taqueria. When its partners accepted a multimillion-dollar private equity investment to expand the business, fans flooded social media with complaints that the business had sold out and would soon decline in quality. The reaction illustrates a recurring tension in restaurant private equity: the attributes that attract investors, including a loyal following and an established brand, are often tied to the small-scale, owner-operated character that customers value and that expansion can dilute.
The source article is brief and does not disclose the deal's exact valuation, the investor's identity, or the planned number of new locations. Readers seeking those terms should consult the original New York Times reporting.
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