Bloomin’ Brands Inc. has made an agreement to sell its Roy’s brand to a Dallas-based Applebee’s franchisee, the Tampa, Fla.-based casual-dining operator said Friday. Terms of the deal were not disclosed.
The agreement came just a month after Bloomin’ Brands said it planned to sell 29-unit Roy’s after deciding the concept would perform better outside Bloomin’ Brands’ portfolio. The deal is expected to close in the next 30 to 60 days. Bloomin’ Brands officials would not comment on the sale beyond a short release.
“Roy’s is not too much of a surprise that it would do better outside the portfolio,” Bloomin’ Brands CEO Elizabeth Smith said at the time.
Buyer United Ohana LLC is a new company formed by Sunil Dharod, an Applebee’s franchisee who owns Apple Texas and Apple Houston. Dharod operates a total of 69 Applebee’s units. He has been involved in the restaurant industry for 30 years and also owns several commercial real estate properties.
Bloomin’ Brands has long left Roy’s out of the loop of its “core four” brands: Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar, Bonefish Grill and Carrabba’s Italian Grill. The company said early last month it would sell Roy’s amid a series of cost-cutting moves that included some restaurant closures, layoffs and the sale of two corporate aircraft.
Dharod will take on the task of turning Roy’s around. In the first nine months of the year, the chain had $52.1 million in sales, a 7.4-percent decrease over the same period a year ago. Same-store sales fell 7.7 percent in the third quarter ended Sept. 28, to $15.7 million, from $17 million the previous year.
Roy’s recorded a nearly $7 million loss before income taxes in the third quarter, including a $6 million impairment charge on the sale. Still, the concept has been losing money even before the impairment charge.
Roy’s was founded in Hawaii in 1988 by chef Roy Yamaguchi, a James Beard Award winner, and is known for its Pacific Rim Cuisine. The chain, which Bloomin’ bought in 2000, has 21 units in the continental U.S., six in Hawaii, one in Japan and one in Guam.
Lazard acted as the exclusive financial advisor to Bloomin' Brands on the sale of Roy's.
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