Dive Brief:

• Elite Restaurant Group has acquired the remaining company owned Project Pie restaurants, including three locations in San Diego and two international locations, according to Restaurant Hospitality. Franchises were not included in the transaction.
• Elite plans to reopen the restaurants as part of Patxi's Pizza, a full-service deep-dish pizza restaurant that it purchased last year.
• It also acquired rights to the 50 Project Pie locations slated for development in Asia, which will now open as Patxi's.

Dive Insight:

Elite appears to be in the business of saving sinking ships, having purchased gourmet cupcake chain Gigi's Cupcake earlier this month, less than a year after the dessert company filed for bankruptcy protection. It also owns Slater's 50/50 and Daphne's Mediterranean (formerly Noon).

Saving restaurant brands is not always a successful endeavor, however. Elite recently closed 11 Noon-Daphne's combination restaurants in Texas due to poor sales performance, with some locations having only been open for a few months. Elite has an aggressive plan for a revamp it's describing as Daphne's 2.0, which could explain the prompt decision to shutter the store locations in anticipation of a revamp.

This rocky road poses serious questions about whether purchasing a handful of pizza restaurants is a wise move, especially in the increasingly competitive pizza segment where companies are coming out with cutting-edge digital offerings at a rapid pace. Pizza may be a more popular segment than Mediterranean, but that only means that the landscape is more crowded.

Project Pie was the brainchild of James Markham, who also developed MOD Pizza and Pieology Pizzeria. After purchasing Patxi's, Elite launched an aggressive growth plan for the pizza chain, including a revamped menu and increased focus on providing guests with a memorable experience, as well as an aggressive franchising plan. The lunch menu targets diners who may be in a hurry, which will likely help attract today's on-the-go consumers. These strategies could help the former Project Pie locations find a new foothold in their local marketplaces.

Takeovers are frequent in the restaurant space, where activist investors see opportunities to help antiquated, sluggish and struggling brands to find a new approach to attracting modern-day consumers. Ancora Advisors recently launched a failed takeover bid for J. Alexander's restaurant chain, while hedge fund Starboard Value successfully flipped Darden Restaurants, which owns Olive Garden.

Elite has seen some success with Slater's 50/50, according to president and owner Mike Nakhleh, who said he plans to expand to 60 full-service locations by 2022. He told Restaurant Hospitality that he's also in talks to buy an undisclosed 35-unit restaurant brand to convert to additional Slater's 50/50 locations.