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Arlington-born juicery South Block looks to add 35 locations after partnering with private equity firm

Sponsored by Monday Properties and written by ARLnow, Startup Monday is a weekly column that profiles Arlington-based startups, founders, and other local technology news. Monday Properties is proudly featuring Three Ballston Plaza

(Updated at 9:45 a.m. on 2/6/24) A private equity firm has partnered with Arlington-born juice and smoothie bowl shop South Block in a deal that will help the local chain advance its plans to add dozens of locations up and down the East Coast.

South Block owner and founder Amir Mostafavi will stay on as CEO post-acquisition, per a press release announcing the deal. The financial terms of the deal were not disclosed.

Mostafavi tells ARLnow he calls this deal a “strategic growth partnership,” as he and the whole South Block team will stay on while Savory Fund will help with its plans to reach 50 locations from the Mid-Atlantic up to the Northeast. The investment fund will also help with business operations, including human resources, finance and accounting, marketing, legal and facilities management.

“First and foremost, we have a great team at South Block already, a great foundation to build on,” Mostafavi said. “We’re excited about growing the business… My team is going to work alongside them and gain knowledge and experience as we’re building our team up in South Block, as we’re continuing to grow.”

South Block Owner Amir Mostafavi in Rosslyn (courtesy of Amir Mostafavi)

Savory’s Managing Partner and Co-Founder Andrew Smith told ARLnow that, when it acquired a majority position in the company, keeping Mostafavi on was a non-negotiable.

“He’s done an incredible job leading this team to the successful level that he has,” Smith said. “He absolutely stands, amongst his peers, way ahead [in] the way that he runs [South Block], and I think it’s because he’s been patient: He hasn’t worried really about growing as fast as he can. He’s been growing as methodically as he can.”

Mostafavi started South Block with its first location in Clarendon, naming the company after its position on the south side of the block, near Trader Joe’s. As the juicery added locations, all within the D.C. area, Mostafavi started searching for a capital partner in 2022 to help him continue to expand the business.

“We’ve done what I think is a great job getting us to 15 locations and we could probably navigate on our own getting to 50, but to have a partner that… has your back, that will support you and that you can learn from just makes the journey feel a lot more relaxed and attainable,” Mostafavi said. “Any time as an entrepreneur that you can try to reduce some of the pressure and stress, that’s a good thing.”

Mostafavi says he was drawn to the Savory Fund after their initial introduction.

“They’re just great people, they genuinely care about the founder of their portfolio brands, the culture and that’s what they go looking for is brands that have a great fan base, a great company culture, that are founder driven, that put people first and that’s what I was looking for,” he said.

The Utah-based investment group says it “specializes in taking fast casual and polished casual food and beverage concepts” and scaling them “into 30-unit+ powerhouse brands.” Smith, Savory Fund’s co-founder, told ARLnow he wants to maintain South Block’s cult following amid the planned expansion.

“More important than scale, where we add dozens more units, we want to grow the business from within and make sure that we grow the base of our cult following and the locations we currently have,” he said.

By focusing on South Block’s leadership ranks and its business processes, he said, Savory Fund will help it “continue to maintain the great business that it is and continue to maintain the cult following that we have within South Block, and continue to maintain that leadership presence, especially in the Northeast.”

Savory Fund was drawn to South Block’s story of growth and change, says Mostafavi.

“We’re a different South Block than we were when we opened in Clarendon in 2011 and I think that’s part of the secret to success in business — you have to always evolve and pivot and listen to your customers and make changes,” Mostafavi said.

Five new locations are already underway, he says. Once those are up and running, Mostafavi said he will set his sights on markets beyond the current D.C., Virginia and Maryland footprint.

“We want to make sure that when we go into that new market we’re making a connection with the community and the people there and telling our South Block stories so they know who we are and that we’re there to do what we can to try to help their communities a little bit better,” he said.

Despite the impending changes, the history of South Block isn’t lost on Mostafavi. He grew up in McLean and said he achieved his success with the help of local customers.

“I really just have a strong connection to the Arlington community, and feel like South Block is Arlington and South Block was built on the shoulders of Arlington,” Mostafavi said. “I’ll always appreciate that. Arlington will always be the foundation for South Block and the catalyst for what started this amazing journey, so I’ll always be grateful to the Arlington community for that.”

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