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Mel’s Diner operator closes units amid debt woes

BONITA SPRINGS Fla. Three of the 11 Mel’s Diners in southwest Florida closed their doors last week, leaving roughly 50 employees without pay and a host of other financial obligations.

Public records show that Bonita Springs-based Creative Restaurant Management Co., the operator of the Florida eateries, is delinquent in paying at least $189,437 in sales taxes and the chain also owes close to $35,000 in back property taxes for two of its restaurants. Additionally, public records show that the company owes another $399,298 for unpaid rents and related damages, interest, attorney’s fees and court costs.

The stores closed include one in Bradenton and two in Sarasota. The closures come on the heels of the shuttering of the Port Richey location in Pasco County, Fla., about a month ago.

The eight other locations still remain open. All but one of those restaurants, however, is run by outside operating partners. Chris Karakosta, president and chief executive officer, however, reportedly remains a silent investor. Karakosta opened the first Mel’s Diner in 1989 and grew the company to its present size.

Calls to the office of Creative Restaurant Management and to Karakosta were unreturned as of press time. However, company officials have been quoted in other media saying that the high costs of several restaurant renovations left the company unable to pay many of its bills, and that the area locations were hard hit by the current economic downturn and would not be reopened.

Other restaurants in the area have recently closed, including a Johnny Carino’s and a Steak and Ale.

In 2005, Karakosta told Nation’s Restaurant News that he was planning an expansion push and a concept overhaul that would include a more upscale image. There were 10 Mel’s Diners at that time, and Karakosta said he had a goal of growing the concept to 50 company restaurants and 50 franchised units within 10 years.

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