Happy Friday to you all dear readers! Hitting the “top of the retail charts” this week has been the sale of both the Luby’s and Fuddruckers brands, in addition to multiple locations. This is joyous news as it means you can continue to stuff yourself silly with hamburgers, and Luanne Platters, and as both chains are slated to live on, it’s even possible that some co-brand locations may remain open. With all this excitement for the survival of both restaurants, it seems little emphasis has been put on the details of both deals, so let’s break that down today!
The sale of Luby’s was announced June 21, 2021, on multiple news sites. While the sale has not been completed, and no public contracts signed at this point, here’s what we know so far. Luby’s Inc is selling their brand name, recipes, logo, etc… along with 32 Luby’s locations. This is all being sold to a newly formed, and presently unnamed company, held by Calvin Gin. Let’s talk for a minute about Gin’s background, it seems that outside of Linkden Mr. Gin doesn’t have much of an online presence. According to his work history, most of his professional career has been dealing with food service companies at an administrative level. Many of the articles I’ve read focused in on his time at Flying Food Group, which is an airport food service company. Among many other roles he held the most written about has been his time as Vice President of Flying Food’s Starbucks operations, which likely consisted of franchise stores in airports. Since then, Mr. Gin has worked with a variety of different food service companies, charities, and a few interesting start-ups. Including his only other online presence, Digital Handshake.
So, this guy seems to know what he is doing in food service, is philanthropic, and has enough money to “blow” by funding start-ups (including drone-based ones!). This doesn’t seem like the worst-case scenario for Luby’s, which in my head ended up with Chris Papas buying one or two locations that would quietly close after a year. So, could this be the save that Luby’s needs? Well, we can’t be 100% sure yet, as no plans have been announced as to what Gin even intends to do with the brand. Given that he has more experience with what equate out to be catering services, including the well-known Blue Plate, we may see a renewed emphasis into Luby’s Food Service as was being pushed with the Luby’s Culinary Services arm in the late 90s. What we do know is that this new company will consist of 32 locations and be named “Luby’s Restaurant Corp” once the deal has gone through. For a full list of restaurants closing, you can view this Houston Business Journal article.
Houston Area Locations Purchased
- 11743 Eastex Fwy, Houston, TX 77039
- 730 FM 1960, Houston, TX 77090
- 11595 Fuqua St, Houston, TX 77034
- 9797 S Post Oak Rd, Houston, TX 77096
- 11250 Northwest Fwy, Houston, TX 77092
- 19668 Northwest Fwy, Houston, TX 77065
- 25660 Northwest Fwy, Cypress, TX 77429
- 7933 Veterans Memorial Dr, Houston, TX 77088
- 12121 Westheimer Rd, Houston, TX 77077
- 485 Mason Rd, Katy, TX 77450
- 24004 US-59, Kingwood, TX 77339
- 10575 W Airport Blvd, Stafford, TX 77477
- 20001 Gulf Fwy, Webster, TX 77598 (Combo Luby’s and Fuddruckers)
Let’s start off on this one by talking about how Luby’s ended up with Fuddruckers. Originally founded in 1979 in San Antonio by Phil Romano, of Romano’s Macaroni Grill fame. Fuddruckers was an early hit as far as burger chains go. It appealed to a yuppie crowd who wanted burgers, but not necessarily fast food, and had to deal with a fair share of competitors, most notably Flakey Jakes. By the late 90s however, Fuddruckers was beginning to feel a bit dated, and was spun off to new ownership. After being with an independent company for a while and making little progress in terms of updates, Austin based Magic Brands LLC acquired Fuddruckers with hopes of turning things around. In addition to the burger joint, Magic Brands also acquired chicken chain Koo Koo Roo (to be said like a crowing rooster) as well. Despite some limited success in the beginning during the mid 2000s recession, things really began to take a nosedive for the company. By 2010 Magic Brands was in the process of liquidating their company and Luby’s made a bid for them. As a result, in June 2010 for $61 Million Luby’s purchased Fuddruckers, Koo Koo Roo, and all 201 restaurants (only three were KKR locations)
So, it’s 2021, just over 10 years later and Fuddruckers is down to a total of 92 locations throughout the United States, while the nosedive feared by many during Magic Brand’s bankruptcy was avoided, Luby’s ownership has proved to be less than fruitful for the company. While I don’t have exact reasoning as to why Fuddruckers fared so poorly under Luby’s, it’s likely related to a few obvious things. The stores were rarely updated or remodeled. We’re in the final steps of Luby’s liquidation, and I still couldn’t tell you which Fuddruckers logo is official because they aren’t consistent. Next, increased competition from upscale quick service burger chains, like Five Guys, Shake Shack, etc… They definitely don’t have the “character” or sit-down charm that Fuddruckers has, but they are usually cheaper, and faster than Fuddruckers. One other big issue is a lack of investment from Luby’s in building new Fuddruckers stores. While a few new locations were built, most were just added onto existing Luby’s locations. So finally, let’s get onto the detail of the sales. In a deal very similar to what Luby’s did with Calvin Gin, they are selling the brand, existing locations, franchise rights, etc… all to one individual, Nicholas Perkins, who was already a major franchisee, but became one of the largest after acquiring 15 locations from Luby’s earlier this year. Perkin’s company is named Black Titan Holding LLC. and will hold own and operate any Fuddruckers previously held by Luby’s, with the exception of those locations that are collocated with a Luby’s Cafeteria.