Has Agreement with Majority Owner, Senior Lender on Terms of Reorganization Plan
Company’s Focus Remains on Strengthening the Business for Growth
Restaurants Remain Open and Operating
NASHVILLE, Tenn. - October 17, 2012 - (BUSINESS WIRE) - Back Yard Burgers, Inc., a leading regional quick service restaurant chain, today announced the final phase of a plan to restructure debt, reduce operating expenses, and position Back Yard Burgers to grow its business, including opening more locations throughout its targeted markets domestically and internationally.
The restructuring plan has the support of both the Company’s majority owner and secured lender.
“We are pleased to have reached an agreement with both our majority owner and our lender that will allow Back Yard Burgers to strengthen our financial core and position the Company to reinvest in our business, improve the customer experience and open new locations,” said James E. Boyd, Jr., the Company’s Chief Executive Officer. “This agreement is the culmination of an ongoing plan to improve the Company’s operations by restructuring debt, addressing underperforming locations and identifying opportunities for growth.
“As always, our entire focus is on finding new ways to improve our business by better serving our customers, either with more menu options, the most comfortable restaurants, or new locations,” Mr. Boyd said. “The plan we are announcing today will ensure Back Yard Burgers can continue providing high-quality food with our signature big and bold backyard taste for years to come.”
In order to implement the agreement, the Company today filed a pre-negotiated Chapter 11 reorganization plan with the U.S. Bankruptcy Court for the District of Delaware. The filing does not include franchise-owned locations. Having already obtained the consent of its secured lender, the Company anticipates the restructuring process will be completed in early 2013.
Additionally, the Company’s majority owner has committed to provide additional financing to support operations during this process. The financing requires Court approval.
“Having an agreement with two of our major stakeholders provides an increased level of certainty that we thought was important, for not only the Company and our customers, but for our loyal employees and business partners,” Mr. Boyd said.
The Company has requested Court authority to pay vendors it deems critical to its business for goods and services provided prior to the October 17 filing date, as long as the vendors agree to continue current terms. All ongoing suppliers will be paid for goods and services provided on or after the October 17 filing date.
Operations are expected to continue as normal during this process, locations remain open, and operators of the approximately 65 franchise locations can continue to rely on Back Yard Burgers for support. Additionally, the Company continues to accept requests for new franchise locations.
Back Yard Burgers previously completed the operational phase of its restructuring, which included a comprehensive review of all of the Company’s more than 40 restaurants, as well as operational efficiencies at the corporate level. The review recently resulted in the closure of 19 Company-owned locations due to underperformance and prohibitive costs. Back Yard Burgers is continuing to review the performance of all locations to ensure they are operating efficiently and supporting the Company’s overall financial goals.
“Like any company in this challenging economy, we had to make the difficult decision to close underperforming locations in order to focus our resources and vision for the future on the rest of the business,” Mr. Boyd said.
For more information about this announcement, please visit www.backyardburgersrestructures.com. Additionally, the Company has set up a toll-free restructuring information hotline at 888-925-4588.
Back Yard Burgers operates and franchises quick-service restaurants in 20 states, primarily in markets throughout the Southeast region of the United States. The restaurants specialize in charbroiled, freshly prepared, great-tasting food. As its name implies, Back Yard Burgers strives to offer the same high-quality ingredients and special care typified by outdoor grilling in the backyard. Its menu features made-to-order gourmet Black Angus hamburgers and chicken sandwiches charbroiled over an open flame, fresh salads, chili, and other specialty items, including hand-dipped milkshakes, fresh-made lemonade, and fresh-baked cobblers.
Back Yard Burgers, Inc.