Savory Fund, a prominent investment firm known for its strategic backing of burgeoning restaurant concepts, has announced a significant investment in Zao Asian Grill, a rapidly expanding pan-Asian fast-casual chain. The transaction, the terms of which remain undisclosed, marks a pivotal moment for Zao, positioning it for accelerated growth and broader market penetration. This partnership underscores Savory Fund’s continued commitment to identifying and nurturing founder-led brands with strong unit economics and a clear vision for the future.
Zao Asian Grill: A Foundation Built on Flavor and Loyalty
Founded in 2013 by industry veteran Dave Duffin, Zao Asian Grill has steadily cultivated a loyal following across the Mountain West region, boasting 23 locations. Duffin’s entrepreneurial acumen is well-established, having previously founded successful ventures such as Zuka Juice and Rumbi Island Bar. The current leadership team at Zao further bolsters its operational strength. CEO Tom Hartman brings extensive multi-unit operational experience across various brands, while Paul Killpack, with his 13-year tenure as CFO of Café Zupas, played a crucial role in scaling that brand from nine to over 80 locations. This depth of experience within the Zao leadership team provides a robust foundation for future expansion.
Zao’s culinary philosophy centers on a chef-driven menu designed to offer approachable, flavor-forward Asian cuisine. The concept features a versatile array of customizable bowls, salads, wraps, tacos, and soups. Customers can select from a variety of proteins, noodles, rice, and fresh vegetables, all brought together by scratch-made sauces. This emphasis on fresh ingredients and customizable options has resonated strongly with consumers seeking both convenience and quality.
A Meeting of Minds: Partnership Driven by Mutual Respect and Shared Vision
The genesis of this investment partnership can be traced back to a long-standing professional relationship between Savory Fund’s Managing Director and Co-Founder Andrew K. Smith and Zao founder Dave Duffin. Smith articulated the deep respect he holds for Duffin’s instinctive ability to build successful brands. "Dave Duffin and I have been circling each other’s orbit for years, always with a nod of mutual respect in this industry," Smith stated. "He’s one of the most instinctive brand builders I know, and I’ve spent years admiring Zao from the outside. Getting to finally roll up our sleeves and build something together, instead of just cheering him on from a distance, is the kind of partnership you don’t pass up. We can’t wait to show the country what the Mountain West already knows about Asian fast casual."
This sentiment was echoed by Dave Duffin, who highlighted the strategic alignment and shared ambition between Zao and Savory Fund. "We’ve spent years proving that this concept works," Duffin said. "When you offer guests approachable, flavor-forward Asian food, they’ll come back for it again and again. Watching this brand earn that loyalty, location by location, has been one of the great honors of my career. What we needed was a partner who could match our ambition without losing sight of what makes Zao special. Savory gets it. They’ve scaled brands before and they know the difference between growing fast and growing right. They are exactly the kind of partner we were looking for."
Fueling Growth: Financials and Expansion Strategy
Zao Asian Grill has demonstrated impressive growth metrics, with recently registered same-store sales increasing by 18.2%. This robust performance is attributed to several key factors, including the escalating consumer demand for clean eating options, a burgeoning catering business, and a strategic cadence of limited-time offers that keep the menu fresh and engaging for customers.
To further accelerate its expansion plans, Zao has secured a substantial $12.5 million debt facility in partnership with Columbia Bank. This financial backing is specifically earmarked to fuel new location development, with projections indicating the opening of more than 10 new Zao locations by 2027. This strategic financial infusion signals a clear intent to capitalize on the brand’s current momentum and expand its geographic footprint.
Tom Hartman, CEO of Zao, emphasized the strength of the existing operational foundation and the anticipated impact of Savory Fund’s involvement. "We’ve built something at Zao guests genuinely love, and the foundation has never been stronger," Hartman commented. "That success is a direct reflection of our incredible unit-level operators and our support center, who show up every day to take care of our guests, develop our people, and bring the Zao experience to life. Now, with Savory’s operational firepower behind us, we’re ready to build on that strong foundation."
Savory Fund’s Strategic Portfolio Expansion
The investment in Zao Asian Grill represents the fourth strategic addition to Savory Fund III, the firm’s latest investment vehicle. This fund is dedicated to supporting emerging restaurant brands with significant growth potential. Zao joins a carefully curated portfolio that includes South Block, Bonrue Bakery, and Hawkers Asian Street Food, each selected for their unique market position and scalability.
Savory Fund has a proven track record of identifying and nurturing high-growth, founder-led brands. Its previous successful investments include Swig, a popular beverage concept; Via 313 Pizzeria, known for its Detroit-style pizza; Houston TX Hot Chicken, a rapidly expanding spicy chicken concept; and Mo’ Bettahs, a Hawaiian-style eatery. The firm’s investment philosophy appears to be centered on empowering experienced management teams and leveraging operational expertise to unlock significant value.
The Broader Implications for the Fast-Casual Sector
The investment by Savory Fund in Zao Asian Grill highlights several key trends shaping the fast-casual dining landscape:
- Continued Demand for Asian Flavors: The enduring popularity of diverse Asian cuisines, particularly in accessible fast-casual formats, continues to drive growth. Zao’s ability to offer a broad appeal within the pan-Asian category positions it favorably in a competitive market.
- The Rise of ‘Clean Eating’ and Customization: Consumers are increasingly prioritizing healthier options and seeking greater control over their meals. Zao’s customizable menu, featuring fresh ingredients, directly addresses these evolving consumer preferences.
- The Power of Experienced Leadership: The emphasis on the depth of experience within Zao’s leadership team, coupled with Savory Fund’s own operational expertise, underscores the critical role of management in scaling restaurant brands effectively.
- The Strategic Role of Investment Funds: Firms like Savory Fund are playing an increasingly vital role in providing the capital and strategic guidance necessary for emerging brands to achieve significant scale and national recognition. Their ability to identify promising concepts and facilitate their growth is a key driver of innovation within the industry.
The partnership between Savory Fund and Zao Asian Grill is poised to significantly impact the fast-casual sector. With Savory’s financial backing and operational acumen, combined with Zao’s proven concept and strong leadership, the chain is well-positioned to expand its presence, capture new markets, and further solidify its standing as a leading pan-Asian fast-casual destination. The coming years will likely see Zao becoming a more prominent player on the national stage, bringing its unique flavors and dining experience to a wider audience. This strategic alliance is a testament to the continued vibrancy and growth potential within the restaurant industry, particularly for brands that can effectively blend culinary appeal with operational excellence and a clear understanding of consumer demands.
