NASHVILLE, Tenn.–(BUSINESS WIRE)–American Blue Ribbon Holdings, LLC (the “Company”) reported it had filed a petition for voluntary Chapter 11 reorganization today with the U.S. Bankruptcy Court of Delaware. Once approved by the Court, this filing will allow the Company to continue operation of its businesses and service to its customers in the ordinary course while it works through the important elements of a plan of reorganization. The Company also noted it has arranged debtor-in-possession (“DIP”) financing of $20 million from Cannae Holdings, Inc., its majority equity owner, in support of the filing and plan of reorganization.
The filing by the Company does not involve or affect the operations of O’Charley’s, LLC or 99 Restaurants, LLC which are not part of American Blue Ribbon Holdings, LLC. Fidelity Newport Holdings, LLC (“FNH”) owns ABRH, LLC which owns the Company. Both FNH and ABRH, LLC will continue operating in the ordinary course and are not parties to the filing.
The Company believes the reorganization will facilitate the Company’s Village Inn and Bakers Square restaurant brands evolution to a healthy core of restaurants and support an approach to the brands that is most beneficial for all stakeholders. As part of the reorganization, the Company will explore a variety of strategic and structural initiatives to best position the Company for success in the future.
Legendary Baking, LLC (“Legendary”), owned by the Company, will continue its current operations in the ordinary course. Legendary is a Blue Ribbon award winning manufacturer of over 25 million pies annually and, with the support of the DIP financing, will be able to conduct its business without interruption and looks forward to the support of its associates, suppliers and customers through this process.
The Company’s financial trends have been negative since 2017 as the restaurant operations struggled with declining sales and acceptable margins. Those challenges are similar to others in the industry particularly as it relates to higher wage rates. During 2018, a potential transaction to separate the Company’s businesses from existing equity ownership was proposed but did not ultimately occur after considerable effort. At that point in the third quarter of 2018, both the restaurant brands and Legendary Baking had new leadership designated to address the performance shortfalls.
During 2018, ABRH, LLC and other non-debtor affiliates assisted the Company in funding its operations. During 2019, in order to fund operating losses, the Company closed and sold its support facility in Denver, closed and sold three fee simple restaurant properties, and accelerated collections of Legendary Baking’s receivables, which were all one-time sources of cash flow.
The Company and ABRH, LLC leadership have worked diligently and strategically to improve the efficiency of the businesses, including substantial reductions in G&A expenses, while maintaining effective operational protocols with focus on improving the customer experience. While new leadership substantially improved the performance of the Company’s businesses with a reduction of its losses by over third, with most of the improvement coming from Legendary Baking, the expectations for 2020 were continued losses for the Company. ABRH, LLC and other non-debtor affiliate companies are no longer willing to fund the Company’s operations which led to the filing.
Accordingly, the Company filed the bankruptcy and closed 33 underperforming stores; obtained post-petition financing that will provide sufficient liquidity for the Company to fund operations during the case; and will explore its strategic options to create a healthy foundation for optimizing the performance of the businesses while under the protection of the Bankruptcy Code. We believe that these efforts will allow the Company and the businesses to maximize their value for the benefit of all stakeholders, including customers, employees and creditors.
The Company has established a toll free hotline for team members, customers and suppliers to address any questions at (833) 991-1558.
American Blue Ribbon Holdings, LLC is owned by ABRH, LLC. Its operations include Village Inn restaurants with 75 company owned locations and 84 franchised locations; Bakers Square with 22 company owned locations; and Legendary Baking with two manufacturing facilities producing over 25 million pies annually with over 75% of sales to third party customers.
- Chopt Creative Salad bought Dos Toros Taqueria on Thursday, according to a company release emailed to Restaurant Dive. The acquisition was financed by private equity firm L Catterton.
- The purchase price and terms of the agreement were not disclosed. Chopt and Dos Toros will form a new holding company called Founders Table Restaurant Group, which will be supported by L Catterton, a Chopt investor. Chopt CEO Nick Marsh will lead the parent company.
- Founders Table will roll out a new multi-concept ordering program and loyalty program later this year that will allow diners to browse and order from Chopt and Dos Toros and earn and redeem loyalty currency across both brands.
Combining a specialty salad chain and a taco joint under one roof may seem unusual at first glance, but Chopt and Dos Toros’ shared focus on fresh, locally-sourced ingredients provides some commonalities.
The most interesting piece of this partnership, however, will be what each brand can learn from the other.
Chopt, for example, opened a pickup- and delivery-only restaurant in New York City last fall to meet an uptick in digital orders, which make up 40% of all company orders. Marsh told Forbes in November that the format provides diners with improved service and efficiency than its typical restaurants.
Dos Toros has also honed in on off-premise opportunity, leaning on catering to grow revenue. In 2019, the chain raked in $5 million in catering sales, or 10% of its overall sales, compared to the $120,000 it made in catering sales in 2012, according to Restaurant Business.
The taco chain has found success by creating a catering model that mirrors its in-restaurant experience, providing a 20-ingredient burrito bar to patrons. The strategy has strengthened diner loyalty — as of last year, 70% of Dos Toros’ catering orders were placed by repeat customers.
This two-pronged focus on off-premise could help both brands accelerate growth with the help of a shared loyalty program.
“This program will enhance the valuable relationships both brands, Chopt and Dos Toros, have with the customers,” Marsh said in a statement emailed to Restaurant Dive. “Our goal is to cement our loyal bases and expand our reach by encouraging trial between Chopt and Dos Toros and potentially additional brands in the future.”
Despite healthy growth and competitive off-premise offerings, both Chopt and Dos Toros have to contend with crowded restaurant segments. Rival salad chain Sweetgreen, for example, bought meal delivery company Galley Foods in Washington, D.C. last year, which will give the chain access to Galley’s logistics technology, courier operations and production capacity. The chain also opened an ambitious “3.0” store format in built to maximize efficiency, though this model has experienced hiccups since opening. And Dos Toros is nowhere close to Chipotle’s annual revenue — in 2018, the smaller chain reached $50 million, while Chipotle reported revenue of $4.8 billion. Still, if the brands continue to invest in off-premise efficiencies and perfect the loyalty piece, both could see increased diner engagement.
January, 22 2020
In its fiscal fourth quarter of 2019, Clean Juice opened 7 new stores and added 13 new franchise units. In December, the company delivered a 21% increase in same-store sales.
“Our team is excited to watch the perpetual growth of Clean Juice as more communities desire healthier, on-the-go and organic food options,” said Landon Eckles, founder and CEO of Clean Juice. “By staying true to our mission of providing the best quality, fully organic food and beverages, we’ve been successful at attracting guests and franchisees in new areas across the country.”
In the fourth quarter of 2019, Clean Juice launched its catering partnership with ezCater, a renowned online business catering platform for restaurants, which is available at participating locations. The company also unveiled its partnership with multiple third-party delivery platforms to make its nutritious menu options even more accessible to guests. Diners can now order Clean Juice from UberEats, DoorDash, Postmates and Grubhub across many of its locations nationwide.
Highlights from Fiscal Fourth Quarter and December 2019:
- Increased system-wide same-store net sales by 21% in December
- Reported a 17% increase in year-over-year average guest spend per visit in December
- Launched nationwide third-party delivery and catering programs
- Offered its first-ever “Organic Vision 2020” juice cleanse presale that sold more than 215 cleanses
- Unveiled its Fall and Winter Menus featuring seasonal Toasts, Greenoa™ Bowls and value combos at attractive price points
- Opened 80th store located in Winston-Salem, N.C.
The fourth quarter results, particularly in December, are a reflection of Clean Juice’s focus on new sales channels as well as the culmination of immense development since the start of 2019. This year, the Clean Juice franchise opened 33 locations across the country, including its 50th store in January in Nashville, Tenn. as well as numerous first-time markets. Stores are now operating in Baltimore, Md.; Lake Charles, La.; Morristown, N.J.; Naperville (Chicago), Ill.; Nashville, Tenn.; and Yorba Linda, Calif. Clean Juice expects to continue its explosive growth with another 35 stores set to open in 2020.
Clean Juice also received numerous accolades and industry awards in 2019. Highlights include Top Emerging Franchise by Franchise Gator, Top 100 Movers & Shakers by Fast Casual, 2019 Top New Franchise from Entrepreneur, and ranking number 431 on the 2019 Inc. 5000 by Inc. magazine.
“Looking back on the past year, we are so proud of the massive progress we’ve made in every aspect of our business, none of which would be possible without our dedicated franchise partners, staff and, of course, our guests,” said Eckles. “We are humbled by the support and success we’ve had and look forward to seeing what the new year will bring.”
While the concept of juicing has been around since the 1970s, Eckles and his wife, Kat, discovered a market need for an all-organic juice bar and healthier fast food options. With no existing concept, they created their own store in Charlotte, N.C. that ultimately led to franchising and an unrelenting mission to provide communities with a truly healthy and delicious organic product. Since June 2016, the company has sold over 140 franchises in 23 states.
The fast-food burger chain has gone into debt protection with $65 million in debt and closing units, says RB’s The Bottom Line.
By Jonathan Maze on Jan. 21, 2020
Not even an all-you-can-eat burger offer could save Krystal from bankruptcy.
The 300-unit chain filed for Chapter 11 bankruptcy protection this week, after months of executive changes, store closings and staff cuts all meant to improve the company’s deteriorating finances.
The chain closed 44 locations, including 13 on one day in December, according to bankruptcy filings. It also has about $65 million in secured debt, including a $1.5 million second-lien loan taken out in October to provide the Chattanooga, Tenn.-based chain with working capital.
The filing comes after numerous efforts that, several months ago, appeared to give the company some life, including an all-you-can-eat offer that company officials proudly proclaimed a success.
Krystal also filed for bankruptcy despite an equity infusion in 2018 that cut the company’s debt in half and helped to fund a scrape-and-rebuild remodel of nine locations that generated strong sales shortly after reopening.
Those nine locations generated same-store sales growth ranging from nearly 30% to 107.5%, the company said.
Yet according to bankruptcy court documents the remodels were costly, about $950,000 per location. And even though Krystal reversed years of same-store sales declines last year, it would prove to be too late.
Bankruptcy filings said the company faced numerous “strong industry-specific headwinds” that hurt sales, including competition, delivery and labor challenges. “It is not uncommon for quick-service restaurants to face store-level turnover rates in excess of 200%,” the company said in a filing.
But Krystal’s biggest problem dates back to 2015, when the company took out $115 million in debt.
It cut that debt with an April 2018 equity infusion. That came at the same time as the brand brought in former McAlister’s Deli executive Paul Macaluso to be the CEO, and set about to revamp its operations.
The company was in need of a revamp: Between 2015 and 2018, the chain’s system sales declined by 10%, even though it had roughly the same number of restaurants, according to data from Restaurant Business sister company Technomic.
The equity infusion did not prevent the company’s financial deterioration. The company defaulted on financial requirements in its lending agreements at the end of the year, receiving a “going concern” designation.
Krystal defaulted again last year, leading to a forbearance agreement with its lenders and, ultimately, numerous changes in the brand and its operations.
It announced plans in October to sell as many as 150 locations to franchisees in several states to “spur the chain’s growth.”
That would double franchise operations and would get the company more in line with many of its fast-food competitors—though notably, rival White Castle is all company-operated.
It has been closing company-owned units for months: The 44 restaurants it shut down toward the end of 2019 represented one out of every five Krystal locations and 13% of its total unit count before the closures. It now has about 300 restaurants.
In November, Krystal shook up its executive team: Macaluso left the company, taking the CEO job at Another Broken Egg Cafe. Krystal named former Captain D’s executive Tim Ward president and ex-Qdoba executive Bruce Vermilyea CFO.
Complicating matters, however, was a payment card security incident at certain restaurants between last July and September. Krystal uses multiple point-of-sale systems, however, which likely kept the security breach from being worse.