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Calgary-based Edo Japan looks at expansion following change in ownership

This article was published on September 23, 2015 in the Calgary Herald
Written by Mario Toneguzzi.

Calgary-based Edo Japan has partnered with the investment firm Yellow Point Equity Partners of Vancouver which has taken majority ownership of the eatery business.

“They invest in private companies kind of poised for future growth,” said Tom Donaldson, who will remain as president and chief executive of Edo Japan. Donaldson will retain a “significant” stake in the company he has owned since 2006.

“For me, they bring financing and capital that are generally unavailable to owner-managers. It’s amazing what a different world private equity is versus private ownership of a business when it comes to banking and financing. So they bring a lot to the table that way.”

Edo Japan has 109 locations across parts of the country, including 30 in the Calgary area. It also operates in British Columbia, Alberta, Saskatchewan, Ontario and Quebec.

Donaldson said Edo Japan will reach $100 million in annual sales next year from $92 million in the past year.

“By partnering with Yellow Point, we’re positioning ourselves for the next $100 million. We plan to continue to grow — aggressive but steady pace. Kind of the same philosophy I’ve had in the past,” he said.

“I was looking for a partner that would allow Edo to remain an independent brand. I did not want to be kind of gobbled-up by a multi-brand company.”

Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate Inc., in Calgary, said the partnership with Yellow Point is a transformational event in the 30-plus year evolution of the Edo brand.

“The potential for growth with new locations for Edo Japan is enormous really, across North America,” he said. “The injection of capital with the Yellow Point partnership will fuel expansion with additional restaurant locations that will ensure Edo Japan is a leader in their segment of quick-service restaurant industry well into the future.”

In the past, Donaldson said the company has plans to expand by about another 50 stores in the West over the next five to seven years.

Donaldson, former president of Moxie’s restaurants, joined Edo in 1999 with a small equity earn-in position and later purchased the balance of outstanding shares from the founders in 2006. The company was founded in Calgary with its first location at the Southcentre Mall in 1979.

Over the years, the company established itself in shopping mall food courts but with the lack of new enclosed shopping centres being built that opened the door for Edo Japan to expand to streetfront locations and power centres.