Industry News | June 16, 2000

Checkers Sells Restaurants, Manufacturing Facility

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Checkers Drive-In Restaurants, Inc. (Nasdaq:CHKR) announced June 15 that it has sold 16 Rally's restaurants in Jacksonville and Tallahassee, Florida to Burgers & More, Inc. of Charleston, South Carolina, a current Checkers franchisee, for $1.725 million. Burgers & More, Inc. will operate the newly acquired Rally's restaurants as a franchisee and will pay ongoing royalties based on sales at the restaurants.

Burgers & More, Inc. has entered into a development agreement in conjunction with their purchase where they have committed to adding nine new Checkers locations over the next five years.

In a separate transaction, the Company has sold its modular restaurant manufacturing facility located in Clearwater, Florida to Robotic Parking, Inc. for $1.75 million. The Company is in the process of identifying vendors to produce modular restaurant buildings for future restaurant openings. Checkers Drive-In Restaurants intends to use the net proceeds from these transactions to further reduce existing debt.

" Selling restaurants to new and existing franchisees was a necessary step to bring a new culture to the company, said Daniel Dorsch, president and chief executive officer of Checkers. "Selling the manufacturing facility is one of many actions we are taking to position the company to concentrate on operating restaurants. Our future success is based on selling quality food, and manufacturing does not fit with that plan. We have now sold a total of 151 restaurants to franchisees and entered into new development agreements for 85 additional stores with the close of the purchase agreements. We expect to complete additional transactions very shortly.''

Checkers Drive-In Restaurants is moving from a 50 percent corporate/50 percent franchise store mix to a 25 percent corporate/75 percent franchise store mix. Checkers Drive-In Restaurants merged with Rally's Hamburgers in 1999 to create the largest double drive-thru system in the United States.

 

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.