(April 22, 2010)—Burger chain Fuddruckers Inc. and its parent, Magic Brands LLC, filed for Chapter 11 bankruptcy protection Wednesday to ease the sale of its assets to Tavistock Group.
Tavistock Group, a private-equity firm that owns other restaurant companies, has agreed to pay $40 million for the company, including the Koo Koo Roo restaurant brand.
None of the 135 franchisee-owned Fuddruckers restaurants are included in the filing. More than 200 restaurants operate under the Fuddruckers name. The company plans to close 24 of the corporate-owned Fuddruckers by April 30.
"During the course of the transaction, Fuddruckers and Koo Koo Roo guests will see no difference in the quality dining experience they have come to expect in our restaurants," Peter Large, the chief executive of Magic Brands, said in a statement.
Magic Brands plans to subject the Tavistock bid to a court-supervised auction process. The company expects to complete the sale in 60 to 90 days.
Fuddruckers was founded in 1980 in San Antonio, with the goal of serving hamburgers that are cooked to order and made with fresh ingredients. The chain serves burgers ranging from 1/3 of a pound to one pound.
Magic Brands, based in Austin, Texas, purchased the chain in 1998 and has sought to broaden its appeal by expanding its menu.
Based in Windermere, Fla., Tavistock Group's holdings include interests in real estate, sports teams, energy and financial services companies. Its restaurant unit manages a group of boutique eateries, including ZED451, Blackhawk Grille and California Cafe.
According to documents filed with the U.S. Bankruptcy Court in Wilmington, Del., Fuddruckers' top unsecured creditors include food distributors US Foodservice Inc., owed $2.6 million, andCorp. (SYY), owed $290,000.