SSCP Management, a franchisee of Sonic and Applebee's, will spend $15 million to buy Corner Bakery Cafe out of bankruptcy.
The 138-unit fast casual entered court proceedings in late February. The brand experienced decreases in earnings and revenue during COVID because of its mostly urban footprint. A big part of its sales come from catering offices and serving food to on-the-go customers. Corner Bakery has also suffered from inflationary costs, supply chain disruptions, the challenging labor market, and impatient landlords. Unprofitable stores "burdened the company" according to court records, forcing the chain to default on its credit facility last year.
Corner Bakery worked toward a payoff plan with lenders, but SSCP Management entered the picture and bought all of the brand's debt. SSCP intended to foreclose on the chain's assets and scheduled a sale of collateral, which prompted Corner Bakery to file bankruptcy. Now SSCP is going to own the concept, which has restaurants across roughly 20 states from California to New Jersey.
Previously, Corner Bakery had a stalking horse bid agreement with Wexford Capital, a private equity firm working with former Famous Dave's CEO Jeff Crivello. As the stalking horse, the company set the minimum bid at $12 million, which SSCP Management obviously exceeded.
In addition to operating 43 Sonic stores and 80 Applebee's units in Texas California, and Virginia, SSCP Management is also the parent company of Cicis and Roy's, an upscale casual-dining chain. The company is also big on real estate. It owns more than 75 retail and multifamily properties spanning 1,000 acres and more than 1 million square feet. This includes restaurants, apartments and industrial buildings, medical offices, and other real estate holdings. SSCP Management is owned by Sunil Dharod, who oversees everything alongside his son Chris Dharod and daughter Puja Dharod.
The acquisition comes almost three years after Roark Capital—the parent of Focus Brands and Inspire Brands—was sold to Pandya Restaurant Growth Brands, which had also purchased Boston Market a few months earlier.