Luby’s Inc, which is in the process of winding down operations and returning proceeds to shareholders, has agreed to sell its Fuddruckers business to Black Titan Franchise Systems LLC, the companies said late Thursday.
The Houston-based Luby’s, which has been working on the shareholder-approved liquidation since last November, said the sale would make North Carolina-based Black Titan, a newly formed affiliate of Nicholas Perkins and Black Titan Holdings LLC, the largest Fuddruckers franchise operator as well.
The Fuddruckers sale would provide Luby’s with about $18.5 million, including a Black Titan-issued note and assumption of certain liabilities, the company said. They expect the deal to close within 90 days.
Luby’s previously sold 13 company-owned Fuddruckers restaurants to Perkins. Luby's noted that it was in advanced discussions to complete a sale or franchise of an additional 14th Fuddruckers to Black Titan.
In February, the company completed the sale and franchising of a Fuddruckers store on Town and Country Way in Houston to HPCP Investments LLC, an affiliate of Chris Pappas, a director and the former CEO of Luby’s.
After the Black Titan transactions, Luby's said it anticipated having only five remaining stand-alone company-owned Fuddruckers stores operating as well as four combination Fuddruckers operating with Luby's Cafeterias.
Luby’s said the Black Titan deal includes the master ownership of the Fuddruckers brand worldwide. Fuddruckers has 92 locations operating in the United States, including 13 locations operated by affiliates of Perkins.
"We're excited to be purchasing Fuddruckers and look forward to working with Fuddruckers' many dedicated, highly capable franchisees to further build this brand," said Perkins, CEO of Black Titan Franchise Systems, in a statement.
"As a Fuddruckers franchisee, I have a vested interest in ensuring that all Fuddruckers franchisees have the resources, infrastructure and operational and marketing support they need to maximize their return on investment,” Perkins said.
Luby’s said it contacted more than 150 potential buyers before accepting the Black Titan offer.
The company said it was “actively seeking buyers for its Luby's Cafeterias restaurant business segment and Luby's Culinary Contract Services business segment.” The contract services division provides foodservice management healthcare facilities, corporate dining locations, sports stadiums and sales of certain frozen Luby's entrees through retail groceries.
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