Should Texans Flip Out About Whataburger?

by Amy Wolff Sorter

BDT Capital Partners’ recent announcement of its majority stake acquisition in the Texas-headquartered, Dobson-family owned Whataburger restaurant chain has many of those in the Lone Star State flipping out. Harmon Dobson launched Whataburger close to 70 years ago in Corpus Christi, TX. Trading the beloved state icon has prompted angry Texans to take to social media to post memes and snarky comments about betrayal and selling out. While Whataburger has locations throughout the southeast and southwest United States, the chain is considered, by Texans, to be a unique Texas institution.

But, legal experts involved with the food and beverage industry (not with the Whataburger transaction) have one piece of advice: Chill out.

The likelihood is strong that Whataburger will retain its Texas charm and roots, even if it expands from western Alaska to eastern Vermont. “One of the things I noticed from the press release Whataburger put out is that the company is intending to retain or promote most of the senior management team” said Amy Curtis, partner at Thompson & Knight LLP’s Dallas office. “That strikes me as a sign that BDT wants to run things as they are.”

Curtis went on to say that, the company hasn’t announced hiring outside management — another sign that things will likely remain status quo. GrayRobinson PA’s Richard Blau agreed, adding that the Dobson family continued to retain a minority interest in the restaurant for good reason.

“They recognize the importance of Texas and their hometown. They mean a lot to San Antonio, San Antonio means a lot to them, said Blau, who is Chairman of the Alcohol, Beverage and Food Law Department, and operates out of his law firm’s Tampa, FL office. “Yes, they gave up majority equity interest in the business. But the founders and key people are remaining.”

Both attorneys noted that, keeping the same executive team in place in a company buyout situation usually means massive changes for the new, blended entity aren’t likely to occur, in the near term. Blau explained that the Whataburger expansion is more about expanding the concept outside of the southwest and southeast.

“I would expect them to say that hooking up with BDT gives the resources to expand, while maintaining the quality and consistency customers expect,” he added. “We’re not giving up on San Antonio. We’ve just gotten a powerful new engine that’s moving the company forward.”

Pictured: Original Whataburger Restaurant, Corpus Christi, TX

This is the first of a three-part story concerning BDT Capital’s acquisition of a majority stake in Whataburger. The law experts interviewed for this article had no involvement with the Whataburger transaction.

For comments, questions or concerns, please contact Amy Sorter