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Slater’s Brand Deal May Bring Home the Bacon

Slater’s 50/50 restaurants have had no problem pulling in customers to try the meat-centric chain’s signature half-ground beef, half-bacon burgers.

Come fall, thanks to a licensing agreement created by Coastal Limited, a La Jolla-based brand management agency, fans of the brand’s patties will be able to buy them in grocery stores.

It’s the latest deal brokered by the local licensing agency, which is finding success in teaming up with with San Diego companies that haven’t previously pursued monetizing their brands to bring in royalty revenue.

Licensing deals essentially rent out a company’s name or brand, giving another entity permission to use it to sell products or services for a time. The company can retain creative control and ownership of its brand while taking home a cut of sales earned by the licensee.

The Slater’s 50/50 deal could bring in more than $10 million in gross sales in its first year, said Abel Olivera, CEO of Jensen Meat Co., the Otay Mesa-based beef processing company that will be making the burgers.

Packages of the frozen patties will be sold in big-box stores — the brand won’t say which yet — in Southern California and in Dallas, Texas, where the first Slater’s 50/50 restaurant outside of California opened earlier this year.

Coastal Ltd. co-founder Paul Leonhardt was in talks with Slater’s 50/50 founder Scott Slater about helping the brand branch into retail products when Slater sold the restaurant chain to Michael Nakleh, a Los Angeles-based restaurateur, earlier this year.

Nakleh, president of Slater’s Restaurant Group, has big plans for the brand. His aim is to open 15 new restaurants annually — three corporate-owned and 12 franchises.

That sounds like a lot, but Nakleh said he has more than 500 leads on people who want to open a location.

From Restaurant to Supermarket

Expanding the chain was top of mind when he bought the brand, said Nakleh; he hadn’t considered getting into retail right away, though it was in his five-year plan for the company’s growth.

“It wasn’t something I was really looking to do, and I wasn’t even sure how to get started on it,” he said. “I’ve never gone down that retail path before.”

Nakleh, who has been in the restaurant business for more than a decade, has been a franchisee and owned independent restaurants, but owning the Slater’s 50/50 chain is his first turn as a franchisor.

He credits Leonhardt with the brand’s upcoming retail debut.

“We knew we had a lot of unique products that would do well in retail; it was just figuring out how to get it from the restaurant to shelves in stores,” Nakleh said. Next, the brand plans to launch a line of condiments.

“This whole retail line is going to be a large revenue stream to help us take the brand to the next level,” Nakleh said.

The burgers Jensen will make under the Slater’s 50/50 name will come in two- and four-pound packages with six or 12 frozen patties, each weighing one-third of a pound.

Jensen, which produces 75 million pounds of ground beef yearly at its 150,000-square-foot processing plant, has experience selling branded products. It makes burgers for brands including Fatburger and store brands such as Kroger and Sam’s Choice.

Co. Represents 6 Brands

Leonhardt had been doing licensing for San Juan Capistrano-based O Entertainment, the company founded by Steve Oedekerk, when he came up with a product of his own — a hybrid bobblehead toy and lollipop. Acquiring licenses for that product inspired him to start his own licensing business.

Leonhardt teamed up with a friend, intellectual property and licensing attorney Jed Ferdinand, to launch the new company. Ferdinand is based in New York; Leonhardt, at an office on Avenida de la Playa in La Jolla.

Coastal represents six brands, including Slater’s 50/50, Leonhardt said. While contracts vary, typically the firm is paid based on royalties earned by their clients.

The company’s first client was Everyday California, the La Jolla-based kayak tour and equipment rental agency.

Leonhardt arranged the sale of the brand for undisclosed terms to Cherokee Global Brands, which has licensing agreements with retailers and manufacturers in more than 50 countries. Everyday California founders Michael Samer and Christopher Lynch retained ownership of flagship store in La Jolla, where they sell apparel, accessories and footwear through a licensing agreement with Cherokee Global.

Such agreements get the brand in front of people who may never travel to its physical location, Leonhardt said.

Getting Slater’s 50/50 patties in grocery stores, for example, is as much a marketing effort as it is a sales move, he said.

“When you do licensing, it’s not just a money play,” Leonhardt said. “It’s about building your brand, building your brand awareness and extending your brand to people who wouldn’t have the chance to go to a Slater’s 50/50 or take a kayak tour at Everyday California.”

Growth Through Licensing

Chef Maeve Rochford of Sugar & Scribe Bakery in La Jolla has also worked with Leonhardt to get retail products into about 1,400 grocery stores in the Kroger Co. supermarket chain, which operates Ralphs stores in Southern California.

Rochford only has one storefront, but her name is now in front of anyone who shops in those stores, emblazoned on bottles of praline pecan pie filling, orange cardamom fig glaze and spiced cranberry chutney.

“A lot of companies that have been traditionally small can really grow through licensing,” Leonhart said. “Doing this takes them to a national audience.”

That’s something many local companies haven’t considered, he said.

While Coastal Limited isn’t limited by geography, “there are a lot of clients (in San Diego) that aren’t familiar with licensing,” he said. “They do great products that they can expand into other categories, so it’s kind of an untapped market in that way.”

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