12 Fast Food Franchises – Located in MD, VA, PA, WV: Accelerated sale process for all or some locations
Our firm has been retained to seek a buyer for an owner and operator of 12 restaurant franchises in four states (the “Company”, operating under franchise agreements with Long John Silver’s. Annual sales were over $8 million last year, down from a high point of almost $12 million in 2012. The Company believes a return to this level of revenue is attainable, especially in light of the rededication to the brand by corporate ownership.
Long John Silver’s was created in 1969 by Jim Patterson with a simple vision of bringing a unique seafood dining experience from the coast to the rest of America. Since that time, Long John Silver’s has grown to over 1,100 restaurants throughout the United States and Asia and is America’s largest quick-serve seafood chain.
The Company is a family-owned business that was formed in 2007 for the primary purpose of buying and operating retail restaurants. The Company purchased its group of franchised Long John Silver’s locations from Yum! Brands in July 2008, including nine single-branded Long John Silver’s units and six dual-branded Long John Silver’s and A&W units. All of the locations purchased are located throughout Maryland, northern Virginia, the eastern panhandle of West Virginia, and one unit in central Pennsylvania. Since taking over operations in July 2008, the Company has subsequently closed three locations in Virginia because of expiring leases and unfavorable renewal terms.
Currently, the Company employs approximately 175 people. This includes four owners/officers, 13 salaried managers, and 160 hourly staff members. They operate 11 leased locations and one location owned by LGE (seven single-branded and five dual-branded).
The Company was averaging almost $12 million a year in sales between 2010 and 2012. The stores generated same-store sales growth of almost 4% for 2012, which was the first full year of same-store sales growth for the group since before 2004.
Sales were continuing this trend for 2013, however an article published in July by The Center for Science in the Public Interest, a nutrition and health policy watchdog group, had an almost immediate, negative impact on sales. In the article, Long John Silver’s “Big Catch” meal was highlighted as particularly unhealthy, noting that it contained 33 grams of trans fat. In January 2014, Long John Silver’s announced that it had eliminated trans fats from its menu, however sales had already declined about 15% as a result of the article and in part, due to a lack of advertising and effective promotions to drive new and incremental traffic to the stores by the brand.
This reduction in sales put the Company under significant financial pressure and made upgrading facilities and/or equipment impossible. The Company was unable to improve sales in all locations and as a result, has filed bankruptcy and is seeking an immediate sale of some or all of the locations. This is a unique opportunity to acquire any number of turnkey franchises for a well-known brand name, with existing business and established footprints.
- Stalking Horse Bid Deadline: 9/15
- Qualified Bids Due: 10/9
- Auction Sale: 10/15