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Friday, Oct 7, 2022

Brothers Added To Menu

Sam Nazarian is famous for his nightclubs and hotels. His brother David, a financier, invests in green technology companies.

Nevertheless, they both know a good hamburger when they taste one.

So they’re putting millions of dollars into opening dozens more Umami burger restaurants. The Nazarians announced last month that they’ve invested in L.A.’s Umami Restaurant Group.

The Nazarians do indeed enjoy the food there, said Adam Fleischman, who founded Umami in 2009.

Fleischman said he started talking to Sam and David Nazarian about investing four months ago after meeting through a mutual friend. Other investors had been talking about taking a stake in Umami, but Fleischman said SBE’s experience developing restaurants made the Nazarians the best candidates.

“I really liked the kind of platform SBE has, a high-level hospitality system, high-end technology and pretty state-of-the-art stuff for restaurants,” Fleischman said.

The Nazarian brothers invested eight figures through their respective companies, hospitality group SBE and venture capital firm Nimes Capital. They will also sit on Umami’s board.

The big money will pay for a huge expansion of the chain, known for its malt liquor tempura onion rings and signature burgers made with meats ground on site. The plan calls for 40 new locations in the next four years in the greater San Francisco area, Orange and San Diego counties, and other markets such as Las Vegas.

Fleischman said the majority of the locations will be Umami Burger eateries, while others will be the company’s new concept, Umami Ko, a fast-casual version that was recently announced.

Sam Nazarian’s SBE is known for developing hip hotels, nightclubs and restaurants, including the high-end Katsuya sushi chain.

David Nazarian’s Nimes Capital in Century City is known for its portfolio of environmental technology companies, including solar thermal electric power plant developer SolarReserve. He is also the chief investment officer at his family’s investment firm, Nazarian Enterprises.

So will the Nazarian brothers and Fleischman be able to turn Umami into a national hit?

Darren Tristano, executive vice president at Chicago market research firm Technomic Inc., said Umami is expanding at the right time because the national gourmet burger scene is just starting to grow.

“There’s a proliferation of better burger chains on a regional basis with the exception of a few national players, Five Guys and Smash Burger,” Tristano said. “And looking today, 10 different players could emerge as the third largest. The question is: How quickly can you grow and how can you separate from the pack?”


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