Atlanta restaurateur David Davoudpour says he will acquire all 282 Shoney's Restaurants through his Atlanta-based Royal Hospitality Corp. from an affiliate of Texas-based Lone Star Funds, which acquired the chain five years ago for about $275 million.
The price of the acquisition was not disclosed but Hannibal Myers, chief development officer for Shoney's North America Corp., the firm formed to acquire the Shoney brand, tells GlobeSt.com that the sale includes only the restaurant's trademark and franchise rights. Myers says the buyer will evaluate whether to purchase the real estate associated with the restaurants at a later date.
"Shoney's is a fantastic name. We really think of it as an American icon," says Myers, noting that the family-dining chain, known for its buffet and comfort foods, could someday become a national player.
Davoudpour, who owns 112 Church's Chicken restaurants in Arizona, Texas and California, says he plans to return the 50-year-old brand "to its glory days" when the chain operated more than 1,000 locations, primarily in the Southeast, before tough competition forced it to close hundreds of restaurants in the last decade.
"This isn't just a financial transaction for me," he said in a statement about the acquisition. "This is a mission."
Davoudpour's acquisition of the floundering restaurant chain comes at a time when the restaurant industry is undergoing its worst slump in the past 15 years. Shoney's also is facing a $1.5 million lawsuit filed by Centrum Equities, which is trying to recoup a downpayment it placed to acquire the firm last year. Centrum later backed out of the deal, citing a series of corporate problems that included an alleged claim that several company-owned locations weren't adhering to public health laws by keeping food properly refrigerated.
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