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Financing

Chili’s parent agrees to buy back 116 franchises

The price of the restaurants, which had been operated by former NBA great Junior Bridgeman, was not disclosed.
Photograph: Shutterstock

The franchisor of Chili’s Grill & Bar has agreed to buy 116 franchised units of the casual chain from ERJ Dining, the multiconcept operator affiliated with former NBA star Junior Bridgeman. 

Brinker International did not divulge how much it has agreed to pay for the restaurants, which are concentrated in the Midwest. The units generate about $300 million in annual revenue, according to Brinker.

The company said it would finance the deal through its existing credit facilities, and alerted investors that its leverage ratios could rise slightly as a result.

It did not say whether it would retain the acquired restaurants long-term or refranchise them to another operator.

"This acquisition is a compelling opportunity to further invest in our brand, broaden our scale and create growth in earnings and cash flow," Brinker CFO Joe Taylor said in a statement. "We appreciate the relationship we developed with ERJ over the years and view these well-established restaurants as a solid foundation for further growth in these markets."

ERJ became a Chili’s franchisee 14 years ago after building a sizable group of Wendy’s quick-service restaurants. It subsequently became a franchisee of Fazoli’s and Blaze Pizza as well.

The Bridgeman family said in 2016 that it intended to exit the restaurant business to concentrate on its Coca-Cola bottling operations. The group recently expanded into Canada with the purchase of operations there.

At the end of 2018, Junior Bridgeman was reportedly interested in branching into media through the purchase of Sports Illustrated. But a deal never materialized.

Bridgeman entered the restaurant business through the purchase of three franchised Wendy’s units while he was still playing in the NBA. He was drafted by the Los Angeles Lakers in 1975 and eventually traded to the Milwaukee Bucks in a multiplayer deal that included superstar Kareem Abdul-Jabbar.

He retired from the league in 1984.

In the past few years, the Indiana native has surrendered day-to-day responsibilities for business holdings to his sister, Eden—the “E” in ERJ—and his sons, Ryan and Justin. Ryan Bridgeman has also operated franchised Taco Bells.

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