Zao Asian Grill Expansion Fueled by Savory Fund

Zao Asian Grill, a fast-casual concept specializing in customizable Asian-inspired fare, is set to significantly expand its footprint across the United States, backed by a strategic investment from Savory Fund. This partnership marks a pivotal moment for the 23-unit chain, which has demonstrated robust performance with an impressive 18.2% same-store sales growth. The infusion of capital and strategic guidance from Savory Fund is intended to propel Zao into new markets, building on its established presence in the Mountain West region since its founding in 2013.

Complementing the equity investment, Zao has also secured a substantial $12.5 million debt facility from Columbia Bank. This dual-pronged financial strategy is designed to accelerate the development of new restaurant locations. The company has ambitious plans, projecting the opening of over 10 additional restaurants by 2027, signaling a clear intent for national scaling. This expansion aligns with a broader trend in the fast-casual dining sector, which continues to see strong consumer demand for convenient, high-quality, and customizable meal options.

The leadership team at Zao brings a wealth of experience crucial for navigating rapid growth. Founder Dave Duffin possesses a proven track record in the restaurant industry, having previously established successful brands like Zuka Juice and Rumbi Island Grill. Furthermore, Paul Killpack, who served as CFO for Café Zupas during its expansion from nine to over 80 locations, brings invaluable financial and operational expertise to the table. This seasoned management group is well-equipped to guide Zao through its next phase of development.

Savory Fund, a private equity firm with over $750 million in assets under management, views Zao Asian Grill as a strategic addition to its portfolio. This marks the fourth investment from its Savory Fund III vehicle, joining other notable brands such as South Block and Hawkers. Savory Fund's investment philosophy often centers on identifying and nurturing emerging brands with strong unit economics and scalable concepts. Their involvement suggests confidence in Zao's operational model and market potential within the competitive Asian fast-casual segment.

The Asian fast-casual market is a dynamic segment within the broader quick-service restaurant industry, driven by evolving consumer palates and a desire for healthier, globally-inspired options. Zao's focus on fresh ingredients and made-to-order preparation positions it favorably within this growing category. The company's ability to achieve significant same-store sales growth indicates strong customer loyalty and a compelling value proposition that resonates with diners seeking flavorful and convenient meals.

Andrew K. Smith, Managing Director and Co-Founder of Savory Fund, expressed enthusiasm for the partnership, highlighting the opportunity to collaborate closely with the Zao team. Dave Duffin, Zao's founder, emphasized the alignment of vision and ambition between the two organizations, underscoring Savory Fund's understanding of scaling brands effectively while preserving their core identity. This collaborative approach is expected to be instrumental in Zao's national rollout.