With 74 Locations And Growing, Fogo De Chao Is A Powerhouse Brazilian Steak House Chain

After being run by Thomas H. Lee Partners, a private equity firm and having gone public from 2015 through 2018, Fogo de Chao, a chain of all-you-can-eat Brazilian steakhouses, has been owned since April 2018 by the Rhone Group, a global private equity firm that owns 45 portfolio companies and has raised over $10 billion. That ownership provides the funding that has enabled Fogo de Chao to expand to 74 locations globally, with a 15% growth rate.

Thought it operates 58 restaurants in the U.S., with recent openings in National Harbor, Md. and Woodland Hills, Calif, it spans the globe with eateries in Brazil, Mexico and the Middle East. And it has ambitious plans to extend to Canada, the Philippines, Costa Rice and Bolivia.

Fogo de chao means ground fire, and refers to the way the food is cooked on an open fire. Its restaurants tend to be large, in the 6,500 to 9,500 square feet range and can accommodate 200 to 300 guests. New York City, for example, has two: Midtown Manhattan and across from the Queens Center Mall.

In the U.S. in 2023, it plans to open about 10 new locations including four in California and two in New Jersey.

Its U.S. and Brazil eateries are all company-owned, and its eight international locations are franchised. It started franchising in 2020 to appeal to international markets.

A Brazilian all you can eat steakhouse Fogo de Chao, owned by a private equity company, is growing at a crisp rate, and franchising internationally.

According to its CEO, Barry McGowan, who is based in Dallas, Tx., it specializes in the culinary art of churrasco, which involves simple seasoning with cooking over an open flame. He noted that even premium cuts are included in the churrasco experience, such as bone-in ribeye, pork chops and prime lamb.

Despite its being known for its prime steaks and meat, Fogo de Chao is tuned in to changing consumer tastes, for people who want to curtail their cholesterol level and eat more nutritious foods. So it offers a Market Table that includes seasonal salads, soups, fresh vegetable and imported charcuteries.

The Market Table also appeals to carnivores since it also offers in fogo feijoada a traditional black bean stew, consisting of sausage, rice, fresh orange, and farofa (baked yuca flour with bacon). And guests can make unlimited visits to the Market Table.

The full churrasco experience including the signature prix-fix menu that includes all premium and classic cuts, plus the Market Table, costs $59 depending on location. Guests can also opt for the Market Table, including salads, soups and vegetable for $34.

In late March, it introduced a new plant-based menu that includes vegetarian and pescatarian selections, including seared tofu with miso black bean pasta, and roasted power vegetable bowl.

Despite the $59 prix-fixe menu, dinner with an alcoholic beverage, tax and tip can close in on $90 a person. McGowan noted that dinner at most fine-dining steakhouses can average $100 to $120 a

person. “Our value proposition is stronger. We offer better value than a steakhouse if you order filet or ribeye,” he said.

“For that price, guests can order lamb, ribeye, filet, picana, a Brazilian cut, and have a little bit of everything,” he noted.

It also offers happy hour where Brazilian-inspired cocktails cost $9, South American wines $7, and Brazilian beer $5.

That value helps them to appeal to a younger audience. McGowan said that 87% of its clientele consists of millennials, Gen X and Gen Z, and it also attracted 41% female, higher than expected at a steakhouse.

While many steakhouses, because of their pricing, are known as special occasion dinners for birthdays, anniversaries and wedding parties, McGowan said it attracts a wider audience including families or date nights, and also for lunch, brunch and all-day happy hour.

Its customers’ response on Yelp was predominantly very positive with some reservations. Michelle from Fort Lee, N.J. had dinner at the Queens’ Fogo de Chao and raved about her meal there. She found “the service phenomenal, the staff super attentive, the food delicious, and how can you go wrong with unlimited steak?”

But one responder nicknamed Foodie said, “At this price point, Fogo de Chao seemed like a place to celebrate a special occasion or entertain guests. But the execution was just off during the weekend brunch service.” She pointed to an omelet station that wasn’t staffed and was peeved that no one on staff acknowledged their celebration.

And what’s the message that the Rhone Group sends to CEO McGowan? “Keep innovating to please our guests” is McGowan’s reply.

Asked what he sees in Fogo de Chao’s future, McGowan replied, “We’re still on our trajectory of 15% growth, opening 10 to 12 restaurants a year. We’re now coast to coast and building out our markets.”