A huge national restaurant group that oversees brands like Olive Garden and LongHorn Steakhouse acquired an Austin-born Tex-Mex chain this month. Darden Restaurants acquired Chuy’s on July 17.
Under the financial transaction, Darden paid $37.50 per share of the company in all-cash for the company. That equals to what the press release describes as an “enterprise value of approximately $605 million.”
Chuy’s co-founders Mike Young (who passed away in 2023) and John Zapp opened the restaurant in Austin in 1982, taking over what was a vacant barbecue restaurant space on Barton Springs Road. It became known for its Tex-Mex cuisines like enchiladas, creamy jalapeno dip, and margaritas, as well as its kitschy decor and vibes (like the requisite Elvis Presley shrine). They opened more Austin and Texas locations.
In 2006, Young and Zapp sold a majority of the company to private equity firm Goode Partners. After that, the chain went outside of the state with its first location in Franklin, Tennessee in 2009. That expansion continued throughout the country,. In 2012, the company went public and offered stocks. Now there are locations found in 15 states. It recently opened its latest Austin location in Mueller in April.
Young and Zapp also ran Austin Southwestern restaurant Shady Grove, also on Barton Springs, from 1992 to 2020. They also opened Hawaiian and Tex-Mex restaurant Hula Hut in 1993 with business partner Duffy Oyster, but sold their shares in 2009. Young left the Chuy’s board in 2017 and Zapp resigned from the board in 2018 after being charged with assault family violence, according to Austin Business Journal.
Darden oversees many national chain restaurants. These include Italian chain Olive Garden, LongHorn Steakhouse, sports bar chain Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen (which is actually based in Irving Texas), fine-dining chain the Capital Grille, grill and wine bar chain Seasons 52, seafood chain Eddie’s V’s, and Caribbean food chain Bahama Breeze.
