SPARTANBURG, S.C. -- Advantica Restaurant Group Inc. says it will sell its Hardee's franchise subsidiary to CKE Restaurants Inc. for about $415 million.
The sale includes the assumption of $46 million in debt and is expected to be completed by the end of the first quarter. It includes seven Hardee's in South Carolina -- in Aiken, Clearwater, Edgefield, Johnston, McCormick, North Augusta and Saluda.
CKE Restaurants officials said they have no plans for layoffs or changes.
"Generally speaking, the restaurants (in the local area) appear to be well-run, and I presume we will keep the people that are in there," said Andrew Puzder, executive vice president of CKE Restaurants. "From an operational point of view, I don't suspect your going to see a significant change."
James B. Adamson, Advantica's chairman, last week called the sale "a strategic move to own and manage all of our restaurant brands." Advantica owns the Denny's, Carrows, Coco's, El Pollo Loco and Quincy's Family Steakhouse chain.
About $175 million from the sale will be applied toward debt reduction as Advantica emerges from bankruptcy. The company, which changed its name earlier this month from Flagstar Cos. Inc., had debts of $2.2 billion before reorganization.
Advantica is Hardee's largest franchisee with 557 units but it accused the fast-food chain's parent company last March of failing to properly manage the brand. That claim now will be withdrawn, officials said.
"As a franchisee of Hardee's, we did not have control over key aspects of brand management such as advertising and product development," Mr. Adamson said.
Hardee's, the nation's No. 4 fast-food chain, operates 3,119 restaurants in 40 states and 10 countries. The Advantica franchises are scattered across 10 Southeastern states.
CKE Restaurants, based in Anaheim, Calif., operates 668 Carl's Jr. and 26 Rally's quick-service restaurants primarily in California, Nevada, Oregon, Arizona, Mexico and the Pacific Rim. It also operates 107 Taco Bueno restaurants in Texas and Oklahoma.
Last April, CKE announced a $327 million deal to acquire the Hardee's brand and turn it into a subsidiary.
"With CKE's focus on quick-service restaurants and its commitment to the Hardee's brand, this is a win-win for both companies," Mr. Adamson said.
Advantica's Hardee's operations generated $417 million in revenue during the first three quarters of 1997. The franchises' revenues were $603 million in 1996.
Staff Writer Frank Witsil contributed to this article.
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