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Before the turnaround, in 2010, when Yum signaled that it would pivot away from co-branding, it left a strategic void for Long John Silver’s, Kern said, and the brand went through misguided moves like beverage and non-fried menu platforms that did not pan out. Because Long John Silver’s had been acquired for a co-branding strategy that Yum had decided to ditch, he and four other franchisees began talking to Yum about spinning off.

Yum revealed such an intention in early 2011, and by August Kern’s consortium had the winning bid for the business, which Yum announced a month later. LJS Partners closed on the sale in December 2011 and moved to new office space by February 2012.

Even before the spinoff from Yum, some of Long John Silver’s stagnation as a brand had developed during what Kern called “the two lost decades” of the 1990s and 2000s. The brand struggled to service its debt obligations after a leveraged buyout in 1989 took parent company Jerrico Inc. private, and it endured several leadership changes after being divested from Jerrico in 1990.

Long John Silver’s filed for Chapter 11 bankruptcy protection in 1998, and the next year the parent of A&W Restaurants bought the brand out of bankruptcy to combine the two chains under Yorkshire Global Restaurants.

Amid all that upheaval, Long John Silver’s lost its way and produced very little growth in sales or standalone locations, Kern said.

“The company was like this boat veering about for a decade, and with every transition and a lot of energy and effort focused on the balance sheet and servicing debt, the strategic course of the brand and the physical assets got short shrift,” Kern said. “Net-net, where the brand was in 1999 was the same place it was in 1990.”

Yorkshire’s plan for Long John Silver’s was a “fix-and-flip” play, Kern said, which included a co-location strategy beginning around 2000 with A&W units, as well as locations of KFC and Taco Bell. That dovetailed with a co-branding strategy begun at Tricon Global Restaurants, then the parent of KFC, Taco Bell and Pizza Hut. In 2002, Tricon acquired Yorkshire and renamed itself Yum! Brands Inc.

“Yum came in, but their original motivations didn’t really pan out, and they were at a bit of a loss to say what they wanted to do with Long John Silver’s,” Kern said. “So net-net, again, the brand in 2010 was where it was in 2001.”

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN