WHAT-A-CHANGE

Ken Hoffman digs into the juiciest questions after Whataburger's surprising sale

This article originally appeared on CultureMap.


The headline induced heart palpations in drive-thru burger fans across Texas and neighboring states … "Texas-based Whataburger sells to new owner amid expansion plans." While that sounds unsettling, the real concern is:

What does this mean to Whataburger's everyday (sometimes twice-a-day) customer in Texas?

In the immediate future — like tomorrow, next week, next year — probably very little. But in the long run, all bets are off. Most likely, there will be significant changes at your local Whataburger over the next three to five years.

Whataburger is now owned by a private equity company (Chicago's BDT Capital Partners), which may not know a Chop House Cheddar Burger from a Whatacatch Sandwich — and doesn't understand that when you're stuck in morning traffic on I-45, nothing beats a Honey Butter Chicken Biscuit.

That investment company bought Whataburger for only one reason: to make money. Shocking, that's what investment companies do. They are not fast food philanthropists. They're financial killers who want to see a return on their investment.

What's next?

So don't be surprised if they take Whataburger national. That's my big takeaway. It may mean Whataburger may have less Texas on its menu in the future.

The new owners are buying a very successful or stagnant company, depending on how you crunch the numbers. According to QSR Magazine, the bible of the fast food industry, Whataburger is only the No. 22 fast food chain in the U.S. — with total sales of $2.2 billion for its 821 restaurants across 10 states.

But, more important, Whataburger has the second highest sales per store, $2.7 million. That beats the average McDonald's, Taco Bell, Burger King, Wendy's, etc. — the whole bunch of national biggies. Only Chick-fil-A has higher sales per store, a printing press $4 million.

What a deal?

If Whataburger is so successful on a per-store basis, why did the owners sell? Two factors, one probably, one definitely. In Godfather terms, the investment company probably made them an offer they couldn't refuse. While Whataburger has phenomenal sales per unit, it was growing at a very slow rate — only 15 new restaurants in 2017. That same year, Chick-fil-A opened 140 new restaurants. Taco Bell opened 168 new units. Domino's expanded by 216 locations. Popeyes popped the lid on 147 places.

Continue reading on CultureMap to learn about how the rising price of beef could impact burger chains.

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It's Draft SZN! Photo by Carmen Mandato/Getty Images.

On Thursday June 22, the NBA will hold their annual draft. With the Rockets owning the number four overall pick, you'd think things would be looking up for them. However, in a draft where the top three players are all expected to be immediate impact guys, the drop begins where the Rockets are selecting. Armed with some young talent, cap space, and a new head coach, the Rockets are looked at as a team on the rise. But what will help contribute to that rise?

When you have assets, you have options. There are three main options I see here for the Rockets with number four: keep the pick and select the guy you think will work best moving forward; trade up to select the guy they feel they missed out on that isn't a punk Frenchie who dislikes Houston; or trade the pick for an established star. The other option is trading the pick for a good player and a future pick/s. Let's take a look at the options:

Option 1: Keeping the pick means you're drafting the leftovers. Those leftovers start with Amen Thompson. He's the guy I believe can come in and help sooner rather than later. At 6'7 and 215 pounds, he has an NBA body. His skill set can come in handy because he's played point guard. This team could use a true point guard, but Thompson isn't exactly a traditional point. He has the size of a wing player, which allows him to see over the top of the defense. His outside shooting is abysmal and needs a vast improvement. To me, adjusting to life as a pro without his twin brother Ausar, another good draft prospect himself, will be difficult. Overall, I believe he's the guy to take at four if they decide to stay.

Option 2: Trading up to get Scoot Henderson or Brandon Miller may prove to be difficult. Both teams picking ahead of the Rockets have their point guards. Charlotte wants to find Lamelo Ball a running mate and have their eyes rumored to be set on Miller. Portland is trying their best to keep Dame Lillard happy. The Rockets would be best served to trade with either team willing to move down for whatever they offer, provided it's worthwhile. Portland was just in the playoffs the last few years and aren't as far out as some would think. They're the ones I'd eye to trade with. Speaking of Portland and Dame…

Option 3: The Rockets need a point guard and Dame may be looking to get out. Help them start their rebuild and bring Dame to Houston. Or, how about the Jaylen Brown rumors? Fred VanVleet has a player option for next season, then becomes an unrestricted free agent. There are a few options of finding veteran help around the league, especially at the point. Problem is, are any of these team willing to take the Rockets' offers? It'd start with number four, and include other assets as well. This option makes sense if the organization believes the roster, with whatever vet addition they make via trade, is playoff ready.

Option 4: The last option I thought about is to trade the pick for a first rounder in next year's draft and a decent player. I see this as a last resort of sorts. But only if they do not feel comfortable with whatever player they may take. That, and if they want to save cap space for next free agency period. Not having a first rounder next year isn't as bad as one might think. The team will need to make the necessary moves this offseason to ensure that won't be an issue next draft. FOMO is real, especially when a team is rebuilding and can't use one of the best/cheapest forms of acquiring top talent.

I talked with my good friend “TC.” The guy loves basketball and even hips me to a bunch of stuff. He wants them to move up in the draft for Scoot or Miller. While he is a James Harden fan, he doesn't necessarily want him back. He wouldn't mind it, but it's not his first option. I've spoken with a lot of native Houstonians about this. They all want a winner sooner than later, but have different philosophies on how to get there. Personally, I say options two and three are my faves. Trade the pick for help, rookie or vet, and go from there. I guess we'll have to wait three more weeks before we find out. Or will we…

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