Segment: Casual Dining
NFS facilitated the sale of a Denny’s restaurant in Carson, CA in which the buyer, Hergar, Corp. was an existing, two-unit franchisee who was considered an excellent operator, having turned around a low volume Denny’s in a few short years.
Location had multiple, very unique factors:
- Full bar
- Offered dancing and karaoke two nights per week
- Norm’s, a competitor, had recently opened very nearby. Well past due for a remodel
- High volume
- Originally had short lease term that was negotiated by NFS to meet Buyer and Lender needs.
- Sellers financials needed extensive cleanup for Buyer and Lender to recognize the strength of the opportunity
During the transaction, the buyer acquired a second unit from the Franchisor. Financing was completed through Franchisor-recommended lender, that leveraged his existing unit with no debt. Landlord is one of the largest Denny’s landlords in the nation, a publicly traded REIT. We successfully negotiated a long term lease and release of personal guarantees for the Seller.
This transaction was complicated, especially near the end due to COVID-19 combined with ABC (CA State alcohol licensing) timing and procedural issues. This resulted in the Buyer taking possession of the restaurant with the dining room and bar closed. The Buyer is a quality operator and franchisee of Denny’s who will remodel the location and as life returns to normal with the location fully open, this Carson Denny’s should shine brightly in the Denny’s brand.