The affected Atlanta locations, which the company acquired from a franchisee in the third quarter, are at 1935 Powers Ferry Rd. SE, 575 Morosgo Drive NE and 2247 Northlake Parkway in suburban Tucker. Famous Dave's says it is continuing discussions with the landlords of all three restaurants regarding a buyout of those leases.
In a related move, Famous Dave's terminated two leases for restaurants slated to open next year in Hoffman Estates, IL and Hyattsville, MD. The company says it could recognize $2.5 million in charges during its fiscal fourth quarter related to the Atlanta closings and lease terminations.
"We made the decision to take these actions in order to preserve cash and respond appropriately to the current slowdown in market conditions," Christopher O'Donnell, president and CEO of Famous Dave's stated in a release. He added that the company is ensuring that its balance sheet and cash flow can weather any continued softness in the economy.
Famous Dave's stock price has slipped 26% so far this week, ending Wednesday afternoon's trading on the Nasdaq exchange at $2.85 per share, a new 52-week low. In late October, the company posted a 9% revenue gain for the third quarter of $35.1 million, while also reporting a net loss of $763,000 for the same period compared with $1.7 million profit a year earlier.
Famous Dave's, which combines a classic Southern barbecue pit with a live music venue, has 47 locations and 123 franchise units in 36 states. It has 10 restaurants in the Southeast, including one remaining Georgia location at 2821 Washington Rd. in Augusta.
A spokeswoman for Famous Dave's tells GlobeSt.com that no additional closings are planned at the moment, but declined further comment. Meanwhile, the chain opened its newest location earlier this month in Abilene, TX.
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