GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers, Inc., the 349-unit casual dining chain based here, has agreed to buy 17 franchised restaurants in California for approximately $47.5 million.
The restaurants, which generated $56.3 million in revenue in 2006, are owned by Top Robin Ventures Inc. of Fresno and Morite of California.
In a signed letter of intent to buy the franchisees’ assets, Red Robin also agreed to pay up to an additional $3 million if the units achieve certain 2007 sales targets.
Red Robin expects to borrow from its credit facility to fund the purchase. The sale is expected to close in the second quarter.
The franchises restaurants are located in northern Los Angeles County, and the counties of San Luis Obispo, Santa Barbara, Ventura, Fresno, Kings, Tulare and Kern, as well as a portion of Riverside County.
Top Robin has been a franchisee for over 20 years, and is primarily owned by Bill Morrow and Earl Soller.
Earl Soller and his son, Scott Soller, are the operators of the restaurants and employ over 1,400 employees. Morrow and Soller have a combined experience of over 100 years in the restaurant business.