When Z Capital Group acquired Real Mex Restaurants out of bankruptcy and hatched a plan to turn the company around, Ned Algeo was one of the first calls the new owner made.
The New York private equity firm, which paid $47 million in late 2018 for Real Mex, hired two executives to lead an extensive overhaul, including Algeo, who was serving as vice president of accounting and finance at Newport Beach wireless infrastructure firm Mobilitie at the time, and current Chief Executive Randy Sharpe.
“We got to be founders and lead a ‘startup’ that already had a giant base of revenue and a functioning corporate office,” Algeo told the Business Journal.
First steps included changing the multi-brand restaurant operator’s name to Xperience Restaurant Group (XRG), moving its headquarters to a new location in Cypress, and restructuring its portfolio.
That work paid off; 2019 was a banner year for the company, with profits up 400% and systemwide sales hitting $180 million.
This allowed the company to bulk up its brand portfolio, adding Sol Mexican Cocina and Solita Tacos & Margaritas to its collection, which also includes El Torito, Acapulco and Las Brisas among others.
“We were missing that upscale, casual-contemporary brand as part of our portfolio,” Algeo said.
Pandemic Pivot
When the pandemic hit the following year, XRG’s cash flow became Algeo’s priority.
He negotiated rent relief, forged new banking relationships and sought out government aid while cutting costs to keep the business afloat.
XRG ended 2020 with all restaurants in operation and with the same cash balance it started the year with.
“It’s the most I’ve been personally stretched so far,” he said.
The efforts have caught the attention of his peers.
Algeo on May 5 was named Outstanding CFO of a Private Company at the Business Journal’s 15th annual CFO of the Year Awards at the Irvine Marriott.
The award came at the end of the busiest day of the year for the XRG team—Cinco de Mayo.
“I owe it to my team who’s been my support along the way,” Algeo said. “To win and tell our story with them in the room—it was a win for everyone.”
From LA to OC
Algeo’s finance career began in 2004 as a financial analyst at Boeing after graduating from University of California, Los Angeles, with a bachelor’s degree in economics.
But his hospitality career began in college at BJ’s Restaurants, where he worked as a busser, delivery driver and salad chef, and discovered his passion for the restaurant industry.
After getting his MBA at University of Southern California in 2011, he joined Los Angeles’ The Wonderful Co. as the finance director where Algeo honed his wealth management chops.
He left in 2016 to work a year-long stint at Real Mex Restaurants as senior director of finance and, for a few months, interim CFO, marking his return to the hospitality industry, and to his home of Orange County.
After the Real Mex CFO Dessi Sarabosing left to join Mobilitie, Algeo followed in 2017. During his time at the telecommunications firm, he was involved in a major infrastructure rollout for Sprint.
When he got the call to lead XRG through its rebrand, he jumped at the opportunity to solidify his ties to the local community, where he wanted to raise children with his wife, Misha.
The two now have a 3-year-old, Reagan, and a five-month-old, Mila.
Record Year
XRG now counts a 61-restaurant portfolio with over 4,000 employees companywide.
During the pandemic, Algeo made it a priority to ensure all benefits were paid for those employees during furlough.
“The second we had an inkling of reopening, we brought everyone back,” Algeo said.
Despite the staffing shortage that persisted through last year, XRG never shut down a single restaurant as a result of the pandemic.
XRG saw its same-store sales increase 20% over pre-pandemic levels in 2021, when it generated $300 million in revenue.
Under Algeo’s guidance, XRG negotiated eight leases for new units opening this year, including a third Chevys location.
XRG plans to open 70 new stores by the end of the year and forecasts another record year for 2022.
“There are always ways to become more profitable with restaurants, with a plethora of data,” Algeo told the Business Journal. “We’re becoming a big player in the industry. We have the brands and the demand to do some really big things in the future.”
