Bartlett Management Services, Inc. – This group’s 30 Kentucky Fried Chicken franchises were struggling to operate as a result of several expensive equipment leases, an onerous management/advisory agreement, and a number of unattractive property leases. Combined with a decline in revenue and an inability to sustain positive cash flow, the company sought chapter 11 bankruptcy protection and retained SC&H Capital.
SC&H conducted an exhaustive marketing process that resulted in dozens of groups conducting due diligence and engaging in significant discussions about the opportunity. In order to become a qualified bidder, interested groups were required to not only show financial wherewithal to purchase the operation, but they also had to be qualified by KFC Corporate to be a franchisee. SC&H also had to negotiate revised building leases, with 13 landlords, acceptable to buyers. Ultimately, 3 groups submitted offers by the bid deadline, and 2 of those groups were qualified by KFC Corporate to participate in the auction. After numerous rounds of bidding, EYM Foods II, LLC was deemed the winning bidder and proceeded to close and continue to operate the restaurants.