Chicago-based deep-dish pizza chain Gino’s East could be planning to buy the assets of competitor Giordano’s Pizza, as that chain operates under Chapter 11 bankruptcy protection, according to published reports and sources close to the dealings.
Gino’s East parent company Bravo Restaurants Inc. could be among the bidders interested in assets of Giordano’s Enterprises LLC, which filed for bankruptcy in February, the Chicago Tribune has reported. The two chains have competed for market share since the early 1970s.
All of Giordano’s Enterprises assets are for sale, according to Philip Martino, a bankruptcy attorney with Quarles & Brady LLP and the company’s trustee while it operates under Chapter 11. Those assets include five company-owned locations, five joint-venture locations, rights to operate the corporate restaurants, franchise agreements for 40 locations, and Giordano’s intellectual property. Giordano’s owns 20 real estate parcels associated with some of its corporate and franchised stores, Martino added.
Bravo Restaurants did not return a phone call seeking comment.
To convert or not?
Martino did not identify any potential bidders, and because no offers have been submitted in bankruptcy court, industry observers could only speculate about what an acquisition of some or all of Giordano’s business would mean for Gino’s East. Suitors could either buy individual locations and convert them to other restaurants, or acquire all of Giordano’s intellectual property and become the new franchisor to several dozen locations.
Both cases have their merits, consultants said.
“My suspicion is that [Gino’s East] would retain the Giordano’s name and not convert locations to Gino’s East,” said Bob Goldin, executive vice president of Chicago-based market research firm Technomic Inc. “They’re unique properties, and having multiple Gino’s Easts may not be the best strategy … There’s value in scarcity. I’m not saying no to a unit here and a unit there, but the problem with the Giordano’s units hasn’t been the traffic.”
