AFC Ponders Church's Chicken Sale
June 16, 2004
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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.
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