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By MARY SHEDDEN, The Tampa Tribune

Published: October 30, 2007

TAMPA - An aggressive expansion of Lee Roy Selmon's restaurants will be led by a new ownership group that includes the brand's founder.

OSI Restaurants Group on Monday announced the sale of 80 percent of the barbecue brand to an investment group led by Selmon, the Hall of Fame Tampa Bay Buccaneer, and chain president Peter Barli.
Barli and Selmon pitched the spinoff and expansion plans this summer to OSI, the parent company that also operates the Outback Steakhouse and Carrabba's Italian Grill chains. Financial terms of the sale were not disclosed.

'I think this is the right time. We want to expand into other markets,' said Barli, who continues as company president. He also declined to identify members of the investment group that will assume ownership Dec. 31.

The aggressive expansion would increase the six-restaurant chain to 30 in the next five years. Orlando, Oldsmar, Ocala, Jacksonville and Gainesville are among cities tapped as locations through 2009.

Selmon and Barli had been drafting a long-term growth strategy the last two years, but admit it was hard to execute as a small piece of a larger corporate restaurant structure that includes more than 950 Outback Steakhouses. Selmon's is the second smallest of OSI's eight brands and averages about $3.6 million in annual sales per store.

'I think it's been well thought out,' Selmon said of the growth strategy.

The plan is very aggressive, said Nick Vojnovic, president of the Beef O'Brady's franchise chain. That Tampa-based chain spent 10 years building its brand to its current size of 233. Growing slowly in Florida, however, will help with marketing and supply chain hurdles.

'What they are proposing is quite challenging,' said Vojnovic, who also is president of the Hillsborough County Restaurant and Lodging Association.

The Selmon's announcement comes just months after OSI Restaurants shed its public corporate skin in a $3.2 billion sale to two private equity firms. At that time, many analysts speculated the new ownership would try to sell some of the company's smaller brands as a way to reduce an estimated $2.4 billion in debt.

Christopher Muller, leader of the University of Central Florida's Center for Multi-Unit Restaurant Management, said the sale most helps OSI, which is most concerned with its flagship brands. Selmon's roughly $21.6 million in annual sales pales to the bigger brands, he said.

'That $21 million is a drop in the bucket for them. Why should they focus on it?' he said.

OSI President Bill Allen said the sale doesn't mean Selmon's is on its own. The 20 percent ownership will keep OSI involved on many levels, including access to purchasing power. Allen would not elaborate on potential sales of the company's other brands.

'We would not have been open to this if we didn't think Lee Roy and the management team would succeed,' Allen said. 'This brand is a proven success.'

That remaining minority ownership is significant in that OSI remains legally liable for many aspects within the company, Muller said.

'That means they're still psychologically linked,' Muller said. 'They're still committed to the brand.'

But Muller added he wouldn't be surprised to see OSI sell more of its brands, such as Bonefish Grill, Roy's, Fleming's, Blue Coral or Cheeseburger in Paradise.

Barli, who became Selmon's president in 2003, said the brand, menu and image have been tweaked since it opened its first location in Tampa in 2000. In particular, the menu can't be described as strictly Southern or barbecue. Also, newer store motifs reflect a more upscale offering, he said.

Selmon, who also serves on the athletic department staff at the University of South Florida, will not significantly change his role in the restaurant. The chain's menu reflects home cooking the football giant and his siblings got growing up in Oklahoma.
Barli said the store's concept reflects Selmon's spirit and values. Customers won't see significant changes from the way the chain's been run for the last seven years. Current operations have gotten them this far, he said.

'We will live or die on how well we execute,' he said.

Reporter Mary Shedden can be reached at mshedden@tampatrib.com or (813) 259-7365.

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