Howdy partners! It’s a big world, and a lot of stuff is happening all over the place! Covering global markets is great and all, but this week we’re reeling it in to exclusively discuss issues closer to home. This edition of the Weekly Insight will be a two-part hoe-down consisting of the juiciest business news in Texas.
Whataburger Haws its last Yee?
Last week, PE firm, BDT Capital Partners, bought the beloved Texas burger joint/4:00 AM oasis for an undisclosed amount, and Texans were not happy. Why would Texans be mad? You know why.
Whataburger is OUR restaurant! JJ knows it, the governor knows it, and so do you! Wait a minute, Whataburger is in ten states already… and they agreed to the buyout because they wanted to raise money to expand even more…
Nevertheless, the essence of Whataburger’s brand lies in its Texas roots, which is why some see their regional distribution of restaurants as a cheeky method of creating customer loyalty. And what’s more powerful than a loyal, Texan fanbase? Maybe lightsabers, but Texans love lightsabers so that’s not even a valid comparison.
Whataburger has 800 stores that do a combined $2 Billion in annual sales, but some fear the chain will lose brand loyalty and in turn revenue by expanding. Just look at what happened to In-N-Out when they came here. The consensus seems to be that as long as Whataburger doesn’t make any rapid or drastic changes to their menu or brand, fans should remain loyal.
We also recommend BDT keeps the doors open late so Whata can remain the number one destination for parking lot fights in Keller.
The Schlitterbahn Savior
On Thursday, amusement park giant, Cedar Fair ($FUN), purchased the beloved Schlitterbahn locations in New Braunsfels and Galveston for $261 Million. Ohio based Cedar Fair is financing these acquisitions with $500 Million in unsecured debt.
Schlitterbahn New Braunsfels has achieved the “Best Waterpark in the World” award (a big deal for waterparks) 21 years in a row. The two Texas properties combined for $68 Million in 2018 revenue.
Cedar Fair also plans to invest $10 to $15 Million in those parks over the next few years, which could be a boon to both the park and summer tourism in the Comal River area.
“They are the cornerstone of our summer tourism season, without a doubt […] The rivers are our brand, but Schlitterbahn is the catalyst for the industry’s success.”Greater New Braunfels Chamber of Commerce President and CEO, Michael Meek
The backstory: In 2016, a ten-year-old boy was killed on Schlitterbahn Kansas City’s crazy attraction, Verruckt – which is German for “crazy” and also a Call of Duty zombies map. As a result of the tragedy, the ride was demolished, and Schlitterbahn paid out over $20 Million in lawsuits.
In short, the parks were in major financial distress. Hopefully the Cedar Fair buyout will help the park pay-off its $180 Million in debt and improve the guest experience.
Changes to the Law
Governor Abbot just signed and vetoed a lot of bills. Here are some of the highlights:
- Brass knuckles and clubs are now legal and considered a valid method of self-defense. It’s about time we clear out the overcrowded prisons that were filled with wrongfully convicted brass knuckle-heads.
- It is now legal to take home craft beers in Texas. If you’re wondering what this actually means…well it’s just as insignificant as it reads. So yeah, you’re allowed to take home beers from a craft brewery now.
- Red light cameras are now banned. Vroom vroom haha.
Check out the other 474 laws that were passed here.
Buckle up for the Second Step
On Thursday, we’ll complete our Texas edition with an update on some of the major companies headquartered in The Lonestar State. Be sure to check in. Yee haw!