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Urban Plates Served $27M Financing

RESTAURANTS: Morgan Stanley Expansion Capital Feeds Growth Plan

Saad Nadhir has big plans for his San Diego County-based chef-driven/open kitchen restaurant chain, Urban Plates.

Saad Nadhir
Co-founder & CEO
Urban Plates

The restaurateur who co-founded the fast casual dining establishment with John Zagara in 2011, is using a recently closed $27 million financing deal from investment funds managed by Morgan Stanley Expansion Capital to open new Urban Plates in the San Francisco Bay area and in Fountain Valley, as well as refinance current debt.

Morgan Stanley Expansion Capital is a private investment platform targeting late-stage growth equity and credit investments in technology, healthcare, consumer, digital media and other high-growth sectors. Urban Plates falls into that high-growth sector.

Nadhir said he envisions continued expansion, aiming to double its number of locations within the next four years.

Urban Plates currently has 17 restaurants – 14 of them in Southern California, including three in San Diego County. Its original spot in Del Mar where the business started a dozen years ago, is still going strong, as well as Carlsbad and La Jolla.

Nadhir and Zagara are eyeing new locations in downtown San Diego, Mission Valley, the Interstate 15 corridor around Poway, and East County, likely in or near Grossmont Center in La Mesa.

Nadhir said Urban Plates has one of the highest average unit volumes in the fast casual segment. He said that on average, Urban Plates generate $4.3 to 4.5 million dollars of revenue per year, per restaurant. Most of its restaurants are between 3,000 square feet and 3,500 square feet in size.

Urban Plates has emerged as a standout player in the competitive dining landscape by adhering to its commitment to value-based, made-from-scratch offerings.

Urban Plates is known for its thoughtful sourcing strategies like grass-fed cows, cage-free chicken, sustainable seafood and the use of organic ingredients whenever possible. It is part of the company’s fundamental philosophy to invest in food quality across its entire menu.

Nadhir emphasized the importance of maintaining the brand’s core value of using fresh, high-quality ingredients.

“It’s so easy to stray from that… things like getting mashed potatoes from a bag instead of peeling potatoes,” he said. “There’s always lots of pressure to ‘dumb it down,’ but we’ve never succumbed to that.”

Nick Nocito
Executive Director
Morgan Stanley Expansion Capital

Nadhir highlighted the importance of meticulous training processes and operational consistency as keys to achieving the company’s growth. Urban Plates’ open-kitchen concept allows customers to witness the culinary work as ithappen right in front of them, reinforcing the brand’s transparency and commitment to freshness.

“Urban Plates is a unique and differentiated fast casual concept, providing consumers with incredible quality for value,” said Morgan Stanley Expansion Capital Executive Director Nick Nocito. “We are thrilled to partner with the team to help them execute the next chapter of growth and expansion.”

‘Pandemic’s Silver Lining’

The COVID-19 pandemic posed significant obstacles for the restaurant industry, but Urban Plates weathered the storm by pivoting with strategic technology to help digital sales, which are about half of its business, and looking for ways to increase efficiency in its operations.

He said the “pandemic’s silver lining” was that Urban Plates was able to get its operational processes and culinary processes “honed in (on) to make it more efficient to expand.”

Formerly run cafeteria-style with a walking line to order for a dine-in experience, during the pandemic, Nadhir said the company invested in tech to move into the digital age in a sustainable fashion.

It now offers multiple modes of access for customers including app-based ordering, streamlining online orders and adding QR code scanning for seamless dining experiences.

Urban Plates’ growth has been remarkable, especially with some temporary closures and real concerns about the future of restaurants during the height of the pandemic.

The brand has expanded from 175 employees five years ago to more than 700 employees today. The company’s projected revenue for this year is $74 million, with a growth rate of about 15% anticipated for the coming year. By comparison, the company brought in about $42 million in 2017.

Urban Plates in 2021 introduced “Plate Pass,” a subscription-based model that provides customers with a 20% discount on meals in exchange for a monthly fee of $5. The program has gained significant traction, fostering customer loyalty and frequent engagement.

Nadhir remains focused on sustaining the brand’s exceptional quality and service while exploring new markets and opportunities.

Nadhir said that at one time the company made a push out to the East Coast in the Washington, D.C./Virginia/Maryland region, but that “those ended up closing.” He is not averse to expanding in other regions in the West and elsewhere in the future.

Urban Plates

FOUNDED: 2011
CEO: Saad Nadhir
HEADQUARTERS: Solana Beach
BUSINESS: Fast-Casual Restaurant Chain
REVENUE: $74 million
EMPLOYEES: 700
WEBSITE: urbanplates.com
CONTACT: urbanplates.com
SOCIAL IMPACT: Urban Plates helps raise money for local schools and local charities, feeds first responders, supports foster families and local food banks.
NOTABLE: Company’s “Plate Pass,” a pioneering membership subscription plan that gives customers 20 percent off all food and drink purchases for $5 a month, continues to be a huge seller.

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