Bennigan’s Franchisees May Buy Closed Locations

BusinessWeek:

The Bennigan’s down the street may be shuttered for now, but its doors could be open again if the franchisees of the distressed chain get their way.

Bennigan’s and Steak & Ale franchisees are hoping to buy between 40 and 60 restaurants closed by the chains’ parent company when it filed for bankruptcy protection, according to Rob Carringer, managing partner of CRG Partners Group LLC, a financial restructuring firm working with the franchisees to set up operations in the wake of the filing.

Last week, S&A Restaurant Corp., the parent company of Bennigan’s and Steak & Ale restaurants, filed for Chapter 7 bankruptcy protection under pressure to repay its debts. S&A is owned by Metromedia Restaurant Group, a part of billionaire John Kluge’s empire. In a Chapter 7 filing, a company seeks to liquidate its assets and close its doors.

The filing did not include 138 domestic and international franchisee-owned restaurants. Those locations remain open. New York-based CRG, along with private equity firm Atalaya Capital Management LP, has been working with the franchisees to organize them into one group that can handle marketing, construction, supply and other office and operational tasks once handled by S&A.

Carringer said in an interview that CRG has been distributing the financial information from the closed locations to franchisees during the past week.

He said if the franchisees are able to buy any of the properties, “it would be very fast.”