July 18, 2007
IHOP to acquire Applebee’s
IHOP Corp. has sealed a deal to buy Applebee’s International, Inc. for approximately $1.9 billion in cash. The deal has been described as a “gutsy” move for IHOP and its chairman and chief executive [Julia Stewart], a former Applebee’s International executive. Once the deal closes, IHOP intends to transition Applebee’s 508 company-owned restaurants into franchises.
Quiznos franchisees sue for lack of support in opening restaurants
Four Quiznos franchisees have sued the franchisor in United District Court in Akron, Ohio, alleging that they received inadequate support in locating and opening new locations.
All four plaintiffs signed franchise agreements for stores that remain unopened for more than the year permitted for opening a restaurant. According to the suit, as of Dec. 31, 2005, there were nearly 3,000 signed Quiznos franchise contracts that were at least a year old for stores that never opened.
Cereal Anyone?
Kahala-Cold Stone, known for ice cream and sub sandwiches, is delving into the breakfast market. The company has acquired Cereality Operators, Inc., a chain of cereal bars and cafes that opened its first store at Arizona State University in 2003. Cereality has since expanded to seven more locations including downtown Chicago, Newark Liberty International Airport and State College, PA. At the cafes, customers can choose from more than 30 cereal brands and more than 40 toppings, and are served by employees wearing pajama tops.
LA Weight Loss Under Fire for Alleged False Advertising
Oregon Attorney General Hardy Meyers has filed a lawsuit against LA Weight Loss for alleged false and deceptive advertising to consumers of its program costs, fees, products and benefits. Among the allegations are false advertising that the program could be purchased for only $9 a week when, the suit states, consumers were required to pay hundreds of dollars for the entire program at the time of enrollment. The suit also alleges that menu plans were not customized as advertised and that counselors had no nutritional training. The suit seeks civil penalties and restitution to consumers for costs and fees connected with the program. It also demands the company change how it markets products and that scientific evidence be used to substantiate claims Diane Gilmore, a spokesperson for the company, says the charges were without merit or have already been resolved.
July 17, 2007
Triarc Cos. Vying for Wendy’s
Triarc Cos., owner of the Arby’s restaurant chain, is considering a bid for Wendy’s International Inc., the third-largest U.S. hamburger chain. Triarc’s owner [Nelson Peltz] is Wendy’s largest shareholder, with a 9.8% stake. According to these articles, Wendy's may be trying to block a Triarc acquisition.
Champps restaurant chain sold to Fox & Hound parent for $74.8 million
F&H Acquisition Corp., the parent of Fox & Hound Restaurant Group (which operates 87 restaurants under the Fox & Hound and Bailey’s Pub & Grille brands) has agreed to purchase Champps Entertainment, Inc. for $74.8 million, or approximately $5.60 a share. Chammps owns and operates 49 restaurants, and franchises or licenses another 12, in several states nationwide. Champps restaurants specialize in burgers, beer and sports entertainment. The Champps board unanimously approved the merger agreement in early July. Pending shareholder approval, the deal is expected to close late in the third quarter or early in the fourth.