Twenty-six corporate Fatburger locations in California and Nevada are being put up for sale to franchisees as part of an ongoing bankruptcy proceeding, officials with the burger chain said Tuesday.
The units include the corporate locations operated by subsidiaries Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc., which both filed Chapter 11 bankruptcy protection in April 2009. Parent company Fatburger Corp. is not part of the bankruptcy filing.
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At the time of the bankruptcy filing, the two companies operated 32 locations in those states. Company officials said the move would allow them to renegotiate leases and restructure debt. Six locations have either closed or already been sold to franchisees.
The Fatburger chain includes 104 locations worldwide, including four corporate locations outside California and Nevada and about 74 franchised units.
Andrew Wiederhorn, chief executive of Santa Monica, Calif.-based Fatburger Corp., said Tuesday that the 13 units for sale in Nevada are all in Las Vegas and the remaining 13 units for sale are in Southern California — two markets that have been hit hard by the economic downturn.
The chain, however, continues to grow.
Fatburger added 18 locations in 2010, Wiederhorn said, and another 25 locations are expected to open this year, all franchisee-operated and including units in far-flung markets such as Dubai, Kuwait and Kurdistan.
Wiederhorn said he expects the California and Nevada subsidiaries will emerge from bankruptcy in the first quarter this year, following the auction of the 26 units.
The sale is being handled by National Franchise Sales, which said information for prospective bidders would be available around Feb. 25.
Any sale of units individually or as a group, however, will be subject to the approval of the bankruptcy court.
Contact Lisa Jennings at [email protected].