Brinker International Inc. (EAT), a leading casual dining restaurant operator, recently entered into a franchise and development deal with franchisee Muy Mucho Group, under which the latter acquired 21 existing Chili’s Grill & Bar restaurants in Kansas, Missouri and Nebraska. The transaction brought in $19 million in proceeds for Brinker.
In addition to the 21 restaurants acquired, the franchise group also plans to develop 5 to 10 new Chili’s locations in the same region. At the end of first-quarter 2010, domestic and international franchisees operated 40% of Brinker International’s restaurants.
Mark Menking, a veteran in the restaurant industry and former President of the la Madeline Bakery & Cafe restaurant brand, and Jeff Jones, a 24-year Chili’s and Brinker veteran, head the Muy Mucho Group, which is based in Dallas, Texas.
Brinker, the operator of Chili’s Grill & Bar, On The Border Mexican Grill & Cantina and Maggiano’s Little Italy owns or franchises nearly 1,700 restaurants in 29 countries.
Restaurants in the casual dining segment are experiencing sagging comps and declining traffic with cash strapped consumers shifting to low-priced dining options or eating at home. Other operators in the segment are Darden Restaurants Inc. (DRI), Red Robin Gourmet Burgers Inc. (RRGB) and Luby’s, Inc. (LUB).
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