This Beloved Southern Restaurant Chain Was Just Saved From Shutting Down
Texas-based Luby's Inc. completed another crucial step Monday in its plans for liquidation, securing the transfer of a number of its Luby's Cafeteria restaurants to Chicago entrepreneur Calvin Gin. The sale, which includes 32 Texas locations and total ownership of the Luby's Cafeteria brand, is a happy ending for the family dining chain whose future has been hanging in the balance for months.
The sale, which is valued at $28.7 million, is expected to close at the end of June, according to Restaurant Business. Under the terms of the deal, Luby's will retain ownership of its restaurant real estate, to be sold to a third party who will lease it to the new owner. Gin has also indicated that he will rehire almost all of the 32 restaurants' 1,000 employees. He reflected on the deal in a recent statement, expressing satisfaction with its terms and excitement in acquiring "one of the iconic brands in the Texas restaurant market."
This is the second major sale announced by Luby's in less than a week. Last Friday the restaurant company revealed that it had found a buyer for its beloved Fuddruckers brand—Black Titan Franchise Systems, an affiliate of one of its largest franchisees. That sale, valued at just under $20 million, is also slated for a June closure.
Luby's has been in financial difficulty since 2019 and initially announced plans to liquidate in September of 2020, estimating a total yield of anywhere between $92 to $123 million. Following the sale of Fuddruckers and the agreements reached with Gin, the parent company looks to be well on its way to reaching that goal.
Gin was chosen by Luby's from among more than 235 other potential buyers, and currently serves as board member at a number of prominent tech companies, including Helios Visions, Work Plate, and Charming Studios. In addition to tech, he also has a background in the restaurant industry, with close ties to The Flying Food Group, a top-three North American airline catering business.
Luby's, for their part, appeared content with the deal. "I could not be more pleased than to see Calvin Gin, along with many of the existing management team, able to carry on the fine tradition of Luby's brand of food and service in Texas that dates back to 1947," said Luby's Chairman Gerald Bodzy in a press release.
When all is said and done on June 30, Luby's Inc. will still have five of its corporate-owned Fuddruckers and four locations co-branded with Luby's Cafeterias. More importantly, though, it will have the peace of mind that its flagship brand is in good hands.
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