Luby’s has agreed to sell its 92-piece fast-casual brand, Fuddruckers, to a subsidiary of the chain’s largest franchisee, Black Titan Enterprises, in a buyout deal with a potential value of $ 18.5 million.
Back Titanâs subsidiary has also agreed to purchase the land under the Fuddruckers units now operated by the company. The details of this transaction, including the price, were not disclosed.
The sale of the restaurant chain is the latest step in Luby’s liquidation, which was announced in September after the canteen operator failed to find a buyer. Luby’s main business is the eponymous cafeterias, including four paired with a fuddruckers.
Luby has said that it will be attached to these four fud printers as well as five stand-alone units.
The parent company of the intended buyer of Fuddruckers, the newly formed Black Titan Franchise Systems, already owns and operates 13 franchise restaurants and plans to acquire two more. Both Black Titan companies are controlled by Nicholas Perkins, who also has a Washington, DC-based food service management company, Perkins Management Systems. This establishment operates the catering operations of colleges, healthcare facilities, government institutions, offices, and factories. It also caters for sports and entertainment events.
Perkins will serve as CEO of Black Titan Franchise Systems (BTFS), as well as Black Titan Enterprises and Perkins Management Systems.
The deal, announced by Lubys on Thursday, calls on Black Titan Franchise Systems (BTFS) to give Luby’s a note of most of the $ 18.5 million transaction price. Luby’s said it couldn’t guarantee the value will stay at $ 18.5 million, but the public company isn’t adjusting its projections of what its liquidation will bring.
Luby’s said it contacted 150 potential buyers before accepting Perkins’ offer, the highest in the line.
“As a Fuddruckers franchisee, I have a legitimate interest in ensuring that all Fuddruckers franchisees have the resources, infrastructure, and operational and marketing support they need to maximize their return on investment,” Perkins said in one Explanation.
Luby’s has yet to find a buyer for its cafeterias and contract management company, Luby’s Culinary Contract Services, which competes in several of Perkins Management Systems’ non-commercial segments.
Fuddruckers was a pioneer of fast casual dining. It was created by Phil Romano, also the father of Romanos Macaroni Grill and Eatzi’s, as a place where consumers can get a better burger than a typical fast food restaurant.
The burgers were made to order, and early units had a butcher shop and a bakery.
Luby expects the deal to close within 90 days.