Bankrupt Hardee’s operator sells 81 restaurants to High Bluff Capital

Dive Brief:

High Bluff Capital Partners has bought 81 Hardee’s restaurants from Summit Restaurant Group in a bankruptcy auction, the company announced Monday.
High Bluff, which acquired Taco Del Mar, Quiznos, Church’s Texas Chicken and other brands as part of Rego Restaurant Group, will emerge from the auction as a major franchisee for CKE.
The sale impacts the bulk of Summit’s 108 operating Hardee’s locations. Summit filed for Chapter 11 protections in May, following a period of insufficient foot traffic and high costs.

Dive Insight:

High Bluff said the acquisition was part of a plan to enlarge Rego Restaurants to a brand platform with six to 10 brands and between $75 million and $100 million in EBITDA. The company will pursue further acquisitions to support that goal “over the next few years,” said Coady Smith, a principal at High Bluff.

High Bluff acquired units in Alabama, Florida, Georgia, Kansas, Missouri, Montana, South Carolina and Wyoming, according to the press release. The company said this geographical distribution aligned with its strategy of building “a strong presence in historically underserved markets, that have the opportunity for significant growth and value creation.”

“Throughout this process, we have maintained that the restaurants would be sold to a qualified and well-capitalized buyer with demonstrable success across the restaurant, food and beverage markets,” CKE CEO Max Wetzel said in the press release. “High Bluff is the ideal partner.”

Wetzel said High Bluff would be able to pursue investments in restaurant remodels and other initiatives designed to bolster sales.

CKE has undertaken a number of efforts to improve sales and traffic this year. To start, Wetzel joined as CEO in March, and a week later CKE launched a cross-brand loyalty program. In May, right as Summit was filing for Chapter 11, CKE announced a triple partnership with Presto Automation, OpenCity and Valyant AI to offer drive-thru AI to franchisees across its system in hopes of boosting speed of service and containing costs.

CKE said it will take over an specified portion of Summit’s restaurants, in a statement emailed to Restaurant Dive.