Detroit-The franchisor of the Big Boy restaurant chain has filed for Chapter 11 bankruptcy protection. Elias Bros. Corp. also said it will sell the company to investor Robert G. Liggett Jr. The Warren, Michigan-based chain includes 455 Big Boy eateries.
The purchase price was not disclosed but will be made public next week, said Anthony Michaels, Elias' chief executive. The sale is subject to approval by the U.S. Bankruptcy Court. Michaels said the agreement should end speculation about the future of the chain, which has had difficulties with recent expansions as well as cash-flow problems.
"The stores are open, the Big Boy icon goes on," Michaels said. "That line in Austin Powers-'He's always been around'-well, that still holds true." The Big Boy statue, which is prominently displayed outside Big Boy restaurants, was featured in both Austin Powers movies as the vehicle in which Austin Powers' nemesis, Dr. Evil, escaped into outer space.
The company was founded by Fred, Louis and John Elias, who ran small restaurants in the Detroit area after World War II. They later offered to franchise the family-style restaurant to Bob Wian, who founded Bob's Big Boy in California.
Big Boy purchased 34 Shoney's restaurants in October 1998 to expand its national presence. But the conversion took longer than expected, and Elias Bros. fell behind with creditors and had to renegotiate vendor contracts last fall. The company last month closed 43 Big Boy restaurants in Pennsylvania, West Virginia, Ohio and Michigan. But Michaels said business remained good at the remaining restaurants.
Elias Bros. had several offers on the table and reached a purchase agreement with one investment group in August. But that deal fell through and Liggett stepped in, Michaels said. "Mr. Liggett is very committed to this sales process," Michaels said. "We want everyone to understand that Big Boy restaurants worldwide will be fully operational during the reorganization." -Associated Press