Luby’s announced Wednesday that it’s franchising 13 of its remaining 24 company-owned Fuddruckers stores to Black Titan Holdings, an affiliate of food service entrepreneur Nicholas Perkins.
The chain said the transaction will make Black Titan one of the largest Fuddruckers franchisees in the U.S. The move covers four locations in Arizona, one in Kansas, one in Missouri, six in Texas, and one in Virginia. The refranchising of the stores is expected to close in the next 90 days. Luby’s, which also operates 60 Luby’s Cafeterias restaurants, believes the deal is a sign to the marketplace that the Fuddruckers brand is drawing interest.
The move, when finalized, will leave Luby’s with 71 total company stores. Luby’s ended Q3 (June 3) with 108 corporate restaurants—76 Luby’s Cafeterias, 31 Fuddruckers, and a Cheeseburger in Paradise that shut down in October. In August 2015, there were 93 Luby’s, 75 Fuddruckers, and eight Cheeseburger in Paradise locations.
“I am excited about becoming one of the largest Fuddruckers franchisees in the United States,” said Perkins in a statement. “A Fuddruckers hamburger, in my opinion, has always been the standard by which all other hamburgers should be judged. Fuddruckers has a tremendously loyal customer base that is passionate about the brand and the products they sell every day. I look forward to developing lasting relationships with the Fuddruckers employees, customers, and vendor partners. I am keenly focused on the future of this tremendous legacy brand and building upon its rich history.”
The transaction is part of Luby’s overall plan of liquidation, which was first announced in September and later approved by shareholders in November. It envisions a sale of all assets—businesses, operations, and real estate—and an eventual wind down of operations. Those assets include Luby’s Cafeterias, Fuddruckers, the company’s Culinary Contract Services business, and real estate.
On November 11, Luby’s announced it retained JLL, a professional services firm, to assist in the “orderly sale” of its real estate holdings. Luby’s owns the land and building for 42 of its Luby’s Cafeterias and nine of its Fuddruckers. It also owns 18 locations that are not operating.
The net proceeds, after expenses and liabilities, will be distributed to stockholders. The chain estimates that liquidation will generate between $92 million and $123 million.