GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers Inc. said its Red Robin International Inc. holding has agreed to buy 18 franchises of the parent company's namesake casual-dining concept for $47.5 million in cash from Top Robin Ventures Inc. and Morite, both of California. The would-be buyer has already agreed to sweeten the deal with an additional $1 million payment because of the stores' sales performance during the January-through-March period, according to the announcement of the sale.
The agreement calls for Red Robin International to pay an additional $3 million in cash to the sellers if the tendered stores continue to hit quarterly sales targets during the remainder of 2007. All of the units are located in California. The performance threshold for the first quarter was met, so the sellers will receive the extra $1 million when the deal closes, said parent Red Robin Gourmet Burgers.
The company said it expects to take possession of 17 restaurants on June 17, with the remaining store to be managed by Red Robin International under a contract to be signed at that time. The sales announcement did not indicate when the last store is expected to be acquired.
The parent company said it will fund the deal through its credit line and borrowings. The concern, based here, operates or franchises 362 restaurants.