Arby’s two largest franchisees have announced plans that may bring the two companies together.

RTM Restaurant Group, the nation’s largest privately-held restaurant company and the largest franchisee of Arby’s, announced it has submitted a proposal to join with Sybra’s management team to acquire all of the capital stock of Sybra, Inc., a subsidiary of ICH Corporation.

Sybra, the second largest franchisee of Arby’s, filed for Chapter 11 protection in February. Sybra currently operates 239 Arby’s restaurants located primarily in Michigan, Texas, Pennsylvania, New Jersey, Connecticut, and Florida. As part of Sybra’s restructuring plan, an affiliate of RTM and Sybra’s management have agreed to form a joint venture, which has offered to contribute to Sybra $5 million for all of the outstanding stock of Sybra, Inc.

The RTM proposal includes the participation of Sybra’s senior management and the key operators of each of its regions. RTM has discussed the proposal with the senior management of Arby’s, Inc., the franchisor, which has indicated its current support for the plan. According to RTM, Sybra’s most significant suppliers, including Coca-Cola, MBM Corporation and Willow Run Foods, also support the plan.

The recapitalization proposal is not subject to due diligence or financing contingencies, but is conditioned upon a restructuring and/or refinancing of Sybra’s outstanding debt to modify Sybra’s annual debt service. Sybra’s independent directors are currently reviewing the RTM recapitalization proposal.

Russ Umphenour, president and CEO of RTM, emphasized that the recapitalization proposal will ensure a smooth transition for Sybra’s re-organization.

“Our goal is to create a plan that will re-energize Sybra. We are pleased that Sybra’s entire senior management team will participate with us and anchor our plan for a smooth transition out of Chapter 11. RTM and Sybra’s management teams are focused on maintaining momentum while addressing issues with Sybra’s creditors.”

Coca-Cola North America also supports the plan, said Eric McCarthey, senior vice president of Coca-Cola Fountain/North America. “We are enthusiastic about RTM’s proposal,” said mcCarthey. “Bringing together these two leaders in the quick service industry will strengthen both companies’ business plans. As Sybra’s largest unsecured creditor, we strongly support this initiative.”

RTM’s plan also received support from MBM Corporation, the largest distributor for the Arby’s system and Sybra’s largest supplier.

RTM Restaurant Group operates 774 Arby’s restaurants in 21 states and 42 markets.