Industry News | November 12, 2001

Ohio-Area Rally's Restaurants Acquired for $5.1 Million

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Pledging to re-energize the Rally's brand there, SETLA, LLC, an affiliate of ALTES, LLC, today announced that it has acquired sixty Rally's Hamburgers restaurants in the Cleveland, Dayton and Columbus areas of Ohio for $5.1 million.

The new ALTES/SETLA ownership says it it is committed to rejuvenating the Rally's brand by restoring Rally's original value proposition of serving quality food at a great value.

The purchase from Snapp's restaurants brings ALTES/SETLA's total ownership of Rally's locations to 110 stores, making it the largest franchisee in the Rally's/Checkers system. In addition to the purchase of sixty Ohio-based Rally's locations, ALTES/SETLA has acquired the rights to develop an additional twelve restaurants.

"We are very pleased with our decision to acquire all of the Rally's Hamburgers restaurants throughout the Cleveland, Columbus, and Dayton areas," said Robert Alrod, CEO of ALTES, LLC, and SETLA, LLC."The Rally's brand is built on a solid foundation. With our purchase of these stores, we at ALTES/SETLA are committed to focusing upon Rally's original value proposition. We will use our entrepreneurial management platform to revitalize the franchise by offering high quality meals at a better value, with faster and friendlier service."

The acquisition was financed by internally generated capital, and approximately $3.8 million was financed through GE Capital. The external funding reflected the lender's belief in the ALTES/SETLA group's management expertise and the strength of the Checkers/Rally's brand name.

Daniel J. Dorsch, CEO and president of Checkers Drive-in Restaurants, Inc., said, "I am very pleased that ALTES/SETLA has chosen to expand its ownership of Rally's restaurants to include the Ohio market. ALTES/SETLA has already successfully turned around other Rally's markets. They have a team that is committed to the growth of new store development and excellence in operations. We look forward to working with their team on this new acquisition."

"At ALTES/SETLA, we are committed to delivering Rally's core value proposition of quality, value, courtesy, and speed through each of our 110 stores' double drive-thru lanes," said Lenny Levitsky, COO of ALTES/SETLA, who has more than thirty years' experience in the foodservice industry. "Our management team is dedicated to being an effective and enthusiastic franchisee in the Rally's/Checkers system."

In addition to the sixty Rally's locations just acquired in Ohio, ALTES/SETLA owns fifty Rally's restaurants throughout St.Louis, Virginia Beach, and Little Rock. All of the acquired Rally's locations are part of the Checkers Drive-in Restaurants, Inc.'s franchise community.

Mr. Steve Fox, vice president of operations for ALTES/SETLA, is based in Cleveland, allowing for close monitoring of the new acquisition. Mr. Fox is a more than twenty-year veteran of the quick-service industry, including eight years spent as Regional Manager for a Rally's franchisee in Ohio and an additional two-plus years as a franchise business consultant with the Rally's/Checkers franchisor group.

ALTES/SETLA, privately held, is headquartered in Boca Raton, Florida. Under its leadership, the company's Rally's locations in St. Louis, Virginia Beach, and Little Rock have experienced improved operations and achieved positive comparative sales increases throughout the chain in the sixteen months since its acquisition.

This acquisition has placed ALTES/SETLA among the sixty largest quick-service franchisees in terms of unit holders and approximately seventieth in sales among the top two hundred quick-service restaurant operators.