AFC Ponders Church's Chicken Sale
Atlanta-AFC Enterprises Inc., having filed with securities regulators the last of its long-overdue annual and quarterly financial disclosures and earnings statements, turned its focus to redefining and strengthening its business through a strategic divestiture of 1,528-unit Church's Chicken.
AFC is considering selling the largely franchised Church's chain, and hired Bear, Stearns & Co. to evaluate options. The move came one day after AFC said it hired a new president to lead sister brand Popeyes Chicken & Biscuits. In April, AFC said it was considering divesting its Cinnabon chain.
"When we looked at our chicken brands, we [thought]...we had probably reached a point where it was no longer really advantageous or wise for us to continue to own competitive brands," Frank Belatti, AFC's chairman and chief executive, said in an interview. Church's and 1,805-unit Popeyes were beginning to encroach upon each other, and it was getting harder to adjudicate issues between the two brands, Belatti explained. Church's was chosen as the brand to divest for several reasons. "We decided that the best [course] would be to attempt to put a brand into the marketplace that would be around its peak value," Belatti said of Church's. -Nation's Restaurant News