| WILMINGTON, Del., July 6
WILMINGTON, Del., July 6 An operator of 56
Dunkin' Donuts locations filed for bankruptcy on Monday, the
latest in a growing list of franchise operators to seek court
protection due to a steep drop-off in sales.
Kainos Partners Holding Company LLC of Greer, South
Carolina, operates the donut-and-coffee franchises in New York,
South Carolina and Nevada, with eight more under construction,
according to court documents. It employs 700.
The company said the recession has put its customers under
extreme financial stress while food costs have risen.
Kainos Partners joins a growing list of struggling
operators of Dunkin' Donuts, which has 15,000 locations
worldwide. Last month, the operator of several Nashville-area
Dunkin' Donuts and the largest Dunkin' Donuts franchise
operator on the west coast of Florida both filed for
Dunkin' Donuts is a subsidiary of Dunkin' Brands Inc, which
is owned by Bain Capital, The Carlyle Group and Thomas H. Lee
Kainos Partners also said it discovered that its chief
financial officer had engaged in $420,000 worth of financial
transactions involving company assets for his personal use. The
executive was fired in February.
Like the Nashville-area franchise operator, Kainos said its
largest creditor is CIT Group Inc (CIT.N), which is owed about
$25 million. Under the planned reorganization, CIT will reduce
the amount it is owed in return for a 72.5 percent stake in the
Kainos Partners, Dunkin' Donuts and CIT Group did not
immediately return calls seeking comment.
The case is In re: Kainos Partners Holding Co LLC, U.S.
Bankruptcy Court for the district of Delaware, No. 09-12292.
(Reporting by Tom Hals; Additional reporting by Chelsea Emery;
Editing by Richard Chang)