Luby's Inc. said Friday it plans to expand the Fuddruckers brand it acquired this week through a $61 million bankruptcy-court-approved cash deal.
“Fuddruckers will be an excellent addition to our restaurant family,” Christopher J. Pappas, president and chief executive of Houston-based Luby’s, parent to the 96-unit cafeteria chain, said in a statement. “After closing this acquisition, we will focus on existing and newly acquired unit-level performance, establishing effective Fuddruckers franchise community relationships and our expansion plans for our brands.”
U.S. Bankruptcy Court for the District of Delaware approved the sale of Fuddruckers Inc. and Magic Brands LLC of Austin, Texas, to Luby’s after the company bested a $40 million stalking-horse bid by Tavistock Restaurant Group.
Magic and Fuddruckers, which filed for Chapter 11 bankruptcy protection in April, operates 62 Fuddruckers units in 11 states and three Koo-Koo-Roo locations in California. Franchisees operate an additional 135 Fuddruckers stores.
Luby's will assume some Fuddruckers' obligations, real estate leases and contracts and will pay an additional $2.45 million if it does not assume some contracts. The deal is expected to close by July 26.
Peter Large, chief executive for Magic Brands, said management and the creditors’ committee “worked tirelessly to obtain the highest and best value for the brands and we have done just that with the sale to Luby’s.”
Luby's operates restaurants in Texas and several other states as well as providing foodservice management to 17 healthcare, education and corporate-dining sites through its Luby’s Culinary Services division.
Contact Ron Ruggless at [email protected].