Investors buy into Habit, hope to expand

BY ERIC LINDBERG
DAILY SOUND STAFF WRITER

Santa Barbara-based Habit Restaurants, Inc., announced a partnership with an investment group headed by Karp Reilly.
Founders Brent and Bruce Reichard will hold on to the three current Habit restaurants in the Santa Barbara area, including the original location in Goleta, as well as the new restaurant going up at La Cumbre Plaza. They will retain 20 percent ownership of the other locations.

“These guys are great,” Brent Reichard said, referring to the investors. “We’ll be able to expand a little faster because of their investment.”
Reichard said the investment group, which includes Blackrock, JP Morgan and Paul Fleming, founder of PF Chang’s and Flemings Steakhouse, is keeping him around as chairman and CEO, as well as President David Nordahl. The deal was in the works for the past four months, Reichard said. Terms of the transaction were not disclosed.
The Habit owns and operates 24 locations in California, and Reichard said with this partnership they plan to open four to six more restaurants next year and eight to 10 in 2009. There are no plans to move out of state yet, he said, and menus and prices will not change as a result of the deal.
Reichard got his first job at the original Hamburger Habit in Goleta in 1976, purchasing it with his brother Bruce in 1980. Since then, the menu has evolved from chiliburgers and hot dogs to include salads, chicken, tri-tip and albacore sandwiches, and shakes and malts.
“It’s a lot of hard work,” Reichard said, “and a lot of luck.”