Privately-held Fatburger Corporation announced yesterday that a management buyout of a majority interest in the company has been successfully completed. Led by President and CEO Keith Warlick, the buyout of Fatburger Holdings Inc., included shares held by Earvin "Magic" Johnson and partners.
Part of the total purchase price includes a $6 million investment and financing package by Fog Cutter Capital Group Inc. (Nasdaq:FCCG) of Portland, Ore. Fog Cutter's investment and financing package for Fatburger included the purchase of common stock and redeemable preferred stock.
"We are pleased to have a new investment team in place that supports our vision for the future which includes a significant expansion of franchise locations and infrastructure to support future growth," said Warlick.
Johnson, who bought a majority interest in August 2001, released a statement earlier in the day expressing concern over the direction management wanted to take the chain as a reason for the sale. "My partnership team and the existing management had a difference of opinion regarding the strategic direction of the company," Johnson said. Johnson and his partners will retain a minority, non-voting interest in the company.
Fatburger management says it plans rapid expansion from its current 50 restaurants located mostly in the southwest. The company has signed agreements for 169 new restaurants in the Midwest and along the Eastern seaboard, 45 of which were signed just last week.
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