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Good Times Restaurants Inc. (NASDAQ: GTIM) today announced it has acquired the real and personal property related to a high volume restaurant that has been operated by one of its franchisees for a total purchase price of $1,250,000.
Boyd Hoback, President and CEO, said, “This was a great opportunity for our franchisee to take advantage of 2012 tax rates and create a liquidity event based on the hard work he’s put in over the last several years. It’s a great opportunity for us to acquire at a reasonable cost a high volume, very profitable restaurant that has been maintained and operated at a very high level.”
The Company said it plans to sell the real estate underlying the restaurant in a sale leaseback transaction that it anticipates will yield approximately $1.1m in net proceeds. Hoback added, “Our return on investment on the operating asset investment will be far in excess of what we could expect to earn on a new restaurant, even net of the royalties we were receiving from our franchisee. It will be immediately accretive and is a part of the overall rationalization of our existing store base to maximize current and future profitability, including the recent sale a few underperforming stores for cash, reimaging and remodeling of older stores and preparing to build new stores in the Colorado market as opportunities become available.”
The Company also announced it expects to close on another sale leaseback transaction next week that, in combination with the sale leaseback of the recently purchased franchise restaurant, will enable it to pay down all of its remaining term debt.
Good Times is a regional chain of quick service restaurants located primarily in Colorado providing a menu of high quality all natural hamburgers, 100% breast of chicken sandwiches, fresh frozen custard, fresh cut fries, fresh squeezed lemonades and other unique offerings. Good Times currently operates and franchises 39 restaurants.