Frisch's Restaurants Inc.
) finally completed the divesture of all its Golden Corral
operations in Ohio, Indiana, Kentucky, West Virginia and
Pennsylvania. In March this year, the company inked an asset
purchase agreement with NRD Holdings LLC for the sale of 29 Golden
Corral restaurants. With this sale, Frisch's added to its kitty
$49.8 million, prior to adjustments for the proration of real
estate and personal property taxes, total inventory amounts, and
other closing adjustments.
Frisch's Restaurants expects to incur a net loss on the
transaction despite recording pre-tax earnings in the upcoming
fourth quarter of fiscal year 2012. For full-fiscal 2012, Frisch's
Restaurants expects to report a profit. The company will now
strategically evaluate possible uses of the proceeds from sale.
The company will now only operate the segment Big Boy, a full
service chain of family-style restaurants. The company currently
operates 95 company-owned and 25 franchised Big Boy restaurants.
All Big Boy restaurants are spread across Ohio, Kentucky and
Toward the end of last year, Frisch's had engaged an investment
banking firm specializing in the restaurant industry to assess the
strategic alternatives related to its Golden Corral business
segment and optimize the company's assets in that brand so as to
bolster shareholder value. The latest deal was the outcome of that
Last year in August, Frisch's had shut down six underperforming
Golden Corral restaurants. The company is believed to concentrate
only on the brand Big Boy, which is much larger brand than Golden
We believe that Golden Corrals will be handled well by its new
owner. NRD Holdings has a proven track record of operating a
variety of high-end restaurant brands including Popeyes,
Checkers/Rally's and Domino's.
Frisch's is not the only restaurant to streamline itself. One of
Yum! Brands Inc.
) also divested its sluggish Long John Silver's and A&W brands
to concentrate more on its star performers like KFC, Pizza Hut and
Taco Bell. There is also
), which dropped Arby's from its name so that it can concentrate on
its better performing Wendy's hamburger chain.
WENDYS CO/THE (WEN): Free Stock Analysis Report
YUM! BRANDS INC (YUM): Free Stock Analysis
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