The story of Wetzel's Pretzels has taken a new twist that has its investors rolling in dough.
The Pasadena-based bakery chain, known for such gourmet pretzels as the Wetzel's Original and Cin-A-Yum, has been sold for an undisclosed price to Levine Leichtman Capital Partners Inc., an L.A.-based private equity firm.
An investor group that includes film producer John Davis, prominent A-list Hollywood lawyer Jake Bloom and Northwest Airlines Chairman Gary Wilson made the decision to sell after seeing their investment increase elevenfold since 1997.
"When you invest in a company and you have other people investing with you, there comes a time when you need to cash out your investors," Davis said. "The company still has a lot of growth left in it, and it's going to do great over the years."
Wetzel's has used its investors' business and entertainment connections to make its way into theaters, malls and the Disneyland and Disney World theme parks. Wilson is a former Walt Disney Co. director. The son of the late billionaire Marvin Davis, John Davis produced such hits as "Daddy Day Care," "Dr. Dolittle" and "I, Robot," along with the upcoming Eddie Murphy film "Norbit."
The purchase of the pretzel maker marks the third franchise acquisition for Levine Leichtman Capital Partners, whose other investments include the Quiznos sandwich chain and CiCi's Pizza chain. Chief Executive Lauren Leichtman called Wetzel's "a highly recognizable brand" that the firm will expand.
Wetzel Chief Executive Bill Phelps and namesake Rick Wetzel, who will stay with the company, started Wetzel's in 1994. The company took its name from taunts children slung at Wetzel on the schoolyard, as in "Hey Wetzel, you pretzel!"
"This primordial message," the company's website notes, "twisted little Rick Wetzel's impressionable mind."
Now, he has the last laugh. The two head a company with $60 million in sales and 200 stores in 30 states, an operation they expect to build even bigger.
"We've had many offers over the years, but many of those would have been a strategic buyer," Phelps said. "And that's not what we wanted. This option allows us to keep the people here, grow the people and grow the business."