Whataburger: No Longer Just a Texas Staple

Whataburger, a family-owned limited service burger chain based in San Antonio, announced that they had sold a majority stake to Chicago based BDT Capital Partners on Friday of last week. The Dobson family opened the first location in 1950 and since Whataburger has become a regional phenomenon with a fiercely loyal customer base comparable only to other regional burger giants like In-and-Out. The brand is known for their exceedingly private family ownership and a deep connection to the Lonestar State. Therefore, the decision to sell to a company that is not only out of the family, but also outside of Texas has come as a surprise to many consumers.

Source: Whataburger

Other Texas family brands, like Whataburger’s packaged food retailer HEB, have turned down similar and bigger offers favouring regional popularity and local ownership over mass expansion. It will be interesting to see the path of expansion Whataburger chooses to take as much of their demand is driven by location and menu limiting tactics used to drive up sales. Though the brand will undoubtedly pursue expansion outside of the Southwestern US, I would expect that they will continue to employ other key sales drivers including 24-hour operations with lunch/dinner and their extremely popular breakfast menus each being offered for only twelve hours, and not a minute more.

The official deal will take place later this summer with both the CEO/President and Chairman stepping down and the current CFO, Ed Nelson, becoming president with a yet unnamed CEO. The family stated in their release the sale is both “exciting and bittersweet” marking a change for both the family and the state of Texas as a whole. Many famous Texans, including JJ Watt, have taken to social media insisting that the state itself should “buy it back”. Despite temporary blowback, it is safe to expect relatively rapid expansion and initial increased popularity for the brand as the rest of the country finally experiences the joy their Honey-Butter Chicken Biscuits and classic Patty Melts.