‘No Two Alike’ Motto Is One Factor in Bar Louie Decline
Bar Louie, known for allowing franchisees unusual freedom in changing their stores to local tastes, filed for Chapter 11 bankruptcy protection and is putting itself up for sale.
Bar Louie hired an investment banker to sell the chain of 134 restaurants last fall, but three letters of intent turned up no deal. Now the Addison, Texas-based chain has filed for Chapter 11 bankruptcy protection, is closing 38 stores and is seeking bids from its secured lenders, for a minimum bid of $82.5 million, in hopes of attracting a new buyer.
“No two Bar Louie restaurants are alike,” says Bar Louie’s promotional materials in a pitch often made to franchisees, who were allowed unusual freedom to cater their stores to local markets. “Each individual Bar Louie contains its own set of diverse characteristics, yet we offer operational systems and a roadmap to set up franchisees for success.”
It’s ironic, then, that “inconsistent brand experience” was cited as one of three reasons for the decline at the chain. The other two were recent expansion and decreased traffic at malls.
Revenue was down 3.7 percent to $252 million last year, and the declines were “accelerating,” the company said. Its bankruptcy filing lists more than $100 million in debt.
The sale through Chapter 11 “will help us to focus on our profitable core locations and expand in areas that have a proven track record of success,” said Tom Fricke, CEO, in a statement. Private equity firm Sun Capital Partners bought Bar Louie in 2010.