Freeman Spogli acquires fast-casual Mexican restaurant business Cafe Rio from KarpReilly

By: Chris Witkowsky

Freeman Spogli & Co. acquired Cafe Rio, a fast-casual Mexican restaurant company.

Cafe Rio’s existing management team will continue to lead the company and retain an equity stake. Freeman Spogli bought the company from KarpReilly, which invested in the business in 2004. Terms of the deal were not disclosed.

Press Release

Cafe Rio, a high-growth, fast-casual Mexican restaurant company, announced today that it has been acquired by Freeman Spogli & Co. Cafe Rio’s existing management team will continue to lead the company and will retain a meaningful equity stake in the business. The company was purchased from KarpReilly, who invested in the business in 2004. The terms of the transaction were not disclosed.

Founded in 1997 and headquartered in Salt Lake City, Utah, Cafe Rio specializes in serving the highest quality, made-from-scratch meals, using only the freshest ingredients. Its authentic dishes are inspired by recipes and traditional cooking found in Northern Mexico’s Rio Grande region, Southern Texas and New Mexico. The company offers its customers a wide variety of menu items, including burritos, tortillas, salads and tacos that are customized by using various proteins and sauces. Cafe Rio operates over 100 restaurants in eleven states, primarily across the western United States.

“Cafe Rio is a differentiated restaurant concept with a focus on serving craveable food that is 100% made-from-scratch,” said Christian Johnson, a Partner at Freeman Spogli. “The company’s unwavering commitment to food quality and customer service have engendered an extremely loyal customer following, which has led to strong financial results and an impressive track record of consistent growth. We are excited to partner with Dave Gagnon, Steve Vaughan and the management team at Cafe Rio as the company enters its next phase of growth.”

“We are very pleased to be working with Freeman Spogli as we embark on this next chapter for the company,” said Dave Gagnon, Chief Executive Officer of Cafe Rio. “We are incredibly proud of the culture we have built during our partnership with KarpReilly, and believe it provides us with a strong foundation for future growth. Through our new partnership with Freeman Spogli, we will be able to leverage their team’s extensive experience growing restaurant concepts as we look to expand Cafe Rio in both existing and new markets.”

“We are proud of the significant growth Cafe Rio has undergone during our ownership,” said Allan Karp, Co-Founder of KarpReilly. “During our time together, the company has grown from 6 restaurants in Utah to over 100 restaurants in 11 states today. We have enjoyed working with the Cafe Rio management team and look forward to watching the business continue to grow under Freeman Spogli’s stewardship.”

Piper Jaffray acted as exclusive financial advisors to Cafe Rio and KarpReilly. Ropes & Gray LLP and Kirton McConkie PC acted as legal advisor to the company and KarpReilly. Morgan, Lewis & Bockius LLP acted as legal advisor to Freeman Spogli.

About Cafe Rio, Inc.
Founded in 1997 and headquartered in Salt Lake City, Utah, Cafe Rio is a high-growth, fast-casual Mexican restaurant company focused on serving exceptional, made-from-scratch food. The company operates over 100 company-owned restaurants across Arizona, California, Colorado, Idaho, Maryland, Montana, Nevada, Utah, Virginia, Washington, and Wyoming.

About Freeman Spogli & Co.
Freeman Spogli & Co. is a private equity firm dedicated exclusively to investing in and partnering with management in consumer-related and distribution companies in the United States. Since its founding in 1983, Freeman Spogli has invested over $4 billion in 57 portfolio companies with aggregate transaction value of approximately $22 billion, and is currently making investments from FS Equity Partners VII, L.P. Freeman Spogli has offices in Los Angeles and New York. For additional information, visit

About KarpReilly LLC
KarpReilly, LLC is a private investment firm, founded by Allan Karp and Chris Reilly, whose primary mission is to partner with premier small to mid-size growth companies and help them achieve their long-term vision. KarpReilly currently manages funds and affiliates with capital commitments in excess of $500 million. Over the past 10 years, the principals of KarpReilly have invested in, sat on the boards of and nurtured over 25 growth companies. For more information, please visit