One of Sydney’s favourite restaurant groups just got swallowed by a hungry corporate

Cafe Nice, one of six restaurants in the Fratelli Fresh group.

One of Sydney’s most popular produce and restaurant groups, Barry McDonald’s Fratelli Fresh, has been sold to the rapidly expanding Urban Purveyor Group (UPG).

McDonald, who started out with a series of fresh produce and Italian grocery stores under the Fratelli Fresh brand, went on to open five Italian-style Cafe Sopra eateries as part of the outlets, as well well as Cafe Nice at Circular Quay.

He will stay with the company as an advisor, while his daughter and Fratelli Fresh’s COO, Nina Gravelis, is joining UPG’s senior leadership team as brand GM.

Urban Purveyor Group, Australia’s largest restaurant business, already owns the Sake and Bavarian Bier Café brands, and has been on a massive expansion program as it targets a $1 billion IPO listing in the next 12 to 24 months.

The addition of Fratelli Fresh to the mix from this week takes UPG to 26 venues, 10 brands and 2000 staff, with more than $200 million in annual revenue.

UPG CEO Thomas Pash told Business Insider that his company is planning to roll out the brand nationally, also adding up to 100 smaller express pizza stores in the next five years.

“Fratelli Fresh, including Café Sopra and Café Nice, hold a special place in the hearts of Sydneysiders and we are excited to add such an amazing and much-loved business and innovative team to our group,” he said.

Pash said they approached McDonald 12 months ago after identifying Italian as a crucial area for UPG’s brand strategy and portfolio.

“We put together a short list and Fratelli was on top of the list. We spent time saying we were big fans,” Pash said, adding that the feeling was mutual for McDonald.

“We hit it off with them as far as culture and delivering value were concerned and it was a nice, consistent fit,” he said.

Crucially for both men, an idea McDonald has been developing for some time – an express pizza, pasta and gelato restaurant that also offers takeaway – will now come to fruition.

“I’ve wanted to do this for a long time and UPG have given us the resources to make it happen,” Barry McDonald said.

Pash said there will be a roll out of the full-service Cafe Sopra style restaurants along and UPG will look to open 100 express pizza sites nationally in the next five years.

He hopes the prototype express pizza site will open in Sydney’s CBD within six months, with 20-to-30 in CBD areas planned nationally.

UPG’s CFO, Michael Campbell, was previously with Britain’s Gondola Group, developing the PizzaExpress brand.

Meanwhile, Pash and Nina Gravelis will look to introduce to Fratelli and Cafe Sopra brands to Melbourne, with two sites already chosen and a launch date set for June/July.

UPG’s fifth Saké restaurant and bar opens in Melbourne’s Flinders Lane this week, with a brand extension, dubbed Saké Jr, launching in Bourke Street, Melbourne, in May.

Pash said another location in Sydney for Fratelli Fresh is close to being signed off, adding to the existing locations in the CBD, Potts Point, Walsh Bay, and Alexandria.

The company is also opening an 800m square three level Italian place in Grosvenor Place, Sydney, shortly, which Pash says will become a premium Fratelli offering additional seafood, as well as with having a large outside bar.

The CEO says he’s keen to upgrade the existing Fratelli Fresh sites with more bar space and seating by taking advantage of the company’s 10,000m sq production kitchen in South Granville.

He says the business will maintain its retail/provedore side “where it makes sense” and UPG, which has its own beverage and fine foods import businesses, will look for additional synergies.

UPG has been on a massive expansion drive since Pash joined it a little over a year ago. Last November Quadrant Private Equity acquired the 40-year-old business for $175 million from founder John Szangolies, and the CEO is building momentum towards a $1 billion IPO with the next two years.

The acquisition of Fratelli Fresh is the first time UPG has bought an existing restaurant brand and Pash says the company is still in an acquisitive mood, with a target of around 20 to 30 more sites.

“There are still some potential acquisitions – we’re looking for opportunities that are digestible in size, 6-10 units, and there a couple we continue to look at,” he said.

For now UPG is busy opening at least one venue a month for the next six months, with the pace increasing between September and November to 2-4 places monthly.

Pash describes this time as “the perfect storm is coming together”.

“We’re excited about the challenge ahead,” he said.

“The inclusion of a casual, full-service Italian restaurant group enables us to aggressively enter one of the largest global dining sectors.”