Magic Brands, LLC Announces Agreement for Asset Sale with Tavistock Group

Wed Apr 21, 2010 4:23pm EDT

* Reuters is not responsible for the content in this press release.

* Fuddruckers and Koo Koo Roo Restaurants Included in $40-Million Transaction 
* Voluntary Chapter 11 Filing to Facilitate Sale 
* Normal Operations at More Than 200 Restaurants to Continue without
* Secures $14 Million in DIP Financing

AUSTIN, Texas--(Business Wire)--
Magic Brands, LLC, parent of the Fuddruckers and Koo Koo Roo restaurant brands,
announced today that it has signed an Asset Purchase Agreement with Tavistock
Group to sell substantially all of its assets in a $40-million going concern

As required under the purchase agreement and to facilitate the sale, Magic
Brands, LLC and certain of its affiliates have voluntarily filed petitions under
Chapter 11 of the U.S. Bankruptcy Code. None of the 135 franchisee-owned
Fuddruckers restaurants are included in the filing. 

The Tavistock purchase is subject to court approval and Magic Brands will file a
motion to establish bidding procedures to allow other qualified bidders to
submit higher and better offers to purchase the assets. Magic expects the sale
process to be completed within 60 to 90 days. 

"During the course of the transaction, Fuddruckers and Koo Koo Roo guests will
see no difference in the quality dining experience they have come to expect in
our restaurants," said CEO Peter Large. "Our daily operations will continue as
usual in more than 200 restaurants across the country. Employees will be paid
without interruption. 

"This transaction with Tavistock Group allows Fuddruckers to restructure our
finances to provide the highest degree of flexibility to fund our remodel and
expansion program," Mr. Large said. "As demonstrated by the level of interest
from potential bidders over the past several weeks, Fuddruckers is a strong
brand with a national reputation for quality gourmet burgers in a
family-friendly environment." 

As part of Fuddruckers plan to concentrate resources in operations with the
strongest potential for growth, the company will use the Chapter 11 process to
terminate certain leases and will close 24 corporate-owned Fuddruckers
restaurants by April 30, 2010. 

"We regret that some team members have lost their positions as a result of the
restaurant closures, but these difficult actions are essential to the long-term
strength of Fuddruckers," said Mr. Large. "By shedding burdensome leases under
the protection of Chapter 11, Fuddruckers will regain the financial stability
and flexibility it needs to pursue strategic growth initiatives that will
benefit our brand, our franchisees and, most importantly, our guests." 

More than 200 Fuddruckers restaurant locations remain open and their daily
operations will continue as usual. Gift cards purchased at closed restaurants
will be honored at all Fuddruckers and Koo Koo Roo locations. 

Wells Fargo Capital Finance, Inc., the company`s existing senior lender, has
committed to provide debtor-in-possession financing in the amount of $14 million
to facilitate the sale and restructuring. 

FocalPoint Securities, LLC serves as investment banker to Magic Brands and
Goulston & Storrs serves as lead bankruptcy counsel. 

For further information regarding the sale transaction and restructuring
process, please contact the Company`s information line at 877-340-2764 or visit 

About Fuddruckers

Based in Austin, Texas, Magic Brands, LLC, currently operates more than 85
Fuddruckers locations in 11 states and 13 Koo Koo Roo restaurants in California.
An additional 135 Fuddruckers restaurants are operated by franchisees who are
small business owners and multi-unit operators. Since its founding in 1980,
Fuddruckers has delivered uncompromised quality and freshness with its own brand
of always fresh, never frozen, 100% All-American, premium-cut, vegetarian-fed
beef. Fuddruckers 1/3, 1/2, 2/3 and one-pound Fudds Prime burgers are grilled to
order and placed on a Fuddruckers scratch-baked bun made fresh daily in
Fuddruckers restaurant bakeries - ready for guests to pile it high at
Fuddruckers Market Fresh Produce bar for a Build Your Own Burger experience like
none other. 

About Tavistock Group

Tavistock Group is an international private investment company founded by Joe
Lewis. The company provides creative capital structured for each investment
opportunity and looks to deploy between $25 million to $1 billion behind
established businesses which benefit from its capital, flexibility, management
expertise and global network of resources. Tavistock Group invests for the
long-term and focuses on improving all aspects of its investments, striving to
generate strong returns and achieve excellence in every industry in which it

Through Tavistock Restaurants, Tavistock Group holds a diverse collection of
restaurant brands, with concepts ranging from fast casual to fine dining.
Tavistock Restaurants owns and operates Austin-based FREEB!RDS World Burrito,
with 32 locations open and an additional 20 expected to open in 2010. Other
Tavistock Restaurants brands include ZED451, Cafe del Rey, Napa Valley Grille,
Blackhawk Grille, California Cafe and Sapporo. 

For more information on Tavistock Group, visit For more
information on Tavistock Restaurants, please visit

Anita-Marie Laurie
Aaron Curtiss
(512) 275-0674
(310) 788-2850 

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