Frisch’s Restaurants Inc. has closed six of its 35 franchised Golden Corral units due to underperformance. Four of the restaurants were located in the Cincinnati area, and two were in Akron and Medina, Ohio.
The Cincinnati-based company said it would record an asset impairment charge for the six shuttered restaurants in the first quarter of fiscal year 2012, which ends Sept. 20, against pretax earnings, which are estimated to be between $3.9 million and $4.1 million.
Frisch’s expects a reduction in first-quarter earnings per share between 57 cents and 60 cents. Such an impairment charge could cause a net loss for the first quarter, as Frisch’s previous fourth-quarter earnings were 48 cents per share.
“Looking ahead, we believe this decision will eliminate store-level pretax losses of approximately $750,000 to $800,000 per year, positioning us for continued success with improved bottom-line performance,” Frisch’s chief executive Craig F. Maier said. “Revenue generated by the six restaurants in fiscal-year 2011 approximated $12.1 million.”
The company owns all six closed restaurant locations and will sell them through commercial real estate brokers.
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Frisch’s drove a 0.6-percent increase in same-store sales at its Golden Corral units for fiscal year 2011, but sales lost momentum steadily over the second half of the year. Same-store sales rose 1.4 percent in the second quarter for Frisch’s Golden Corral locations, but fell 0.9 percent in the third quarter and 3.6 percent in the fourth quarter.
For fiscal year 2011, Frisch’s saw a 0.4-percent decrease in same-store sales at its Big Boy Restaurants.
Frisch’s operates 95 Big Boy restaurants and licenses another 25 locations in Ohio, Kentucky and Indiana. Its Golden Corral restaurants are located primarily in the greater metropolitan areas of Cincinnati; Cleveland; Pittsburgh; Louisville, Ky.; and Columbus, Dayton and Toledo, Ohio.
Contact Mark Brandau at [email protected].
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