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In its second major acquisition so far this year, the Chattanooga-based Five Star Food Service is buying another Canteen franchise to further expand its vending and workplace food and beverage services to the south.

Five Star, which is already the biggest operator in the Southeast of service-service micro markets serving offices, factories and schools from 29 locations, announced Thursday that it is buying Mobile, Alabama-based vending operator Gulf Coast Canteen. The acquisition expands First Star further into Alabama and marks its entry into Florida, the ninth state served by the growing food retailer.

"We are excited about the entry into two new geographic markets and the opportunities we have ahead of us to develop the existing base business, add new on top, and grow profitably," said Gregory McCall, the chief revenue officer for Five Star.

Five Star's purchase of the south Alabama and Florida panhandle franchise for Canteen comes 10 months after the company expanded north with one of its biggest purchases ever in January when it acquired Canteen Service Co. of Owensboro, Kentucky, Canteen Service Co. of Kentuckiana, Derringer Food Group and John Conti Coffee Co. — all operating collectively as Canteen's third largest franchise. That purchase, which is one of more than 60 acquisitions Five Star has made since it started in Chattanooga in 1993, added western Ohio, southern Indiana and a majority of Kentucky to the company's service territory.

Despite a drop in sales during the worst of the business shutdowns in 2020 due to the COVID-19 pandemic, company marketing director CJ Recher said Five Star has rebounded this year and continued to grow and now has about 2,000 employees servicing over 2,300 micro markets and more than 30,000 vending machines and 15,000 coffee and water service locations.

The privately held company, which was acquired by the Los Angeles equity firm Freeman Spogli & Company in 2019, did not disclose terms of either of its recent purchases or its overall revenues as a company.

Richard Kennedy, Five Star's president and CEO , said the strategic acquisitions are helping to leverage the strengths of the Chattanooga-based food retailer, which operates a fresh food packing center in Lafayette, Georgia as well as local branches in Cleveland, Tennessee and Ringgold, Georgia.

"We are honored by the opportunity to establish ourselves in the Mobile and Pensacola markets through this strategic acquisition," Kennedy said in the announcement of the purchase of Gulf Coast Canteen. "We are excited to merge our company cultures and provide top-tier service to the area."

Gulf Coast Canteen was originally founded as a vending company in 1961 as Central Vending and merged with Mobile Vending in 1999, eventually becoming a Canteen franchise in 2001. Owner Greg Breland took over the family business in 2005 and is selling the company's Ocean Springs, Mississippi operation to Refreshments Solutions in New Orleans in a separate sale.

Five Star Food Service is the biggest operator in the Southeast of self-service micro markets that allow employees to swipe their purchases and pay with cash or credit cards, providing easier and faster purchasing than conventional vending machines.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

 

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