Century Restaurants, Inc. – Reorganization, refinancing strengthen large franchisee

Challenge

Century Restaurants, Inc., a large Jersey Mike’s Subs franchisee that operates 34 restaurants across four southeastern states, engaged Arnall Golden Gregory to assist with the reorganization of its corporate operational structure, including the creation of a new holding company, the conversion of the client’s corporate entities into limited liability companies, the redemption of certain shareholders and the simultaneous refinancing of its debt. AGG’s Corporate and Real Estate teams worked together to negotiate the terms of the credit facility and obtain all required landlord approvals for the transaction. AGG partners Sherman Cohen and Jonathan Neville also introduced the client to Brookwood Associates, an Atlanta-based investment banking firm that specializes in representing restaurant concepts and large franchisees. The client engaged Brookwood Associates, who was instrumental in arranging the financing facility for the transaction.

Approach

AGG’s Corporate and Real Estate Teams have extensive experience in representing fast-growing restaurant concepts and franchisees of major brands in their financing, acquisition and real estate activities. Prior to the closing of the transaction, Century Restaurants, Inc. had an unwieldy corporate structure with multiple small lenders and certain shareholder/owners who were looking to exit the business. These factors, in turn, created significant challenges to the client in achieving its growth strategy.

Result

As a result of the transaction, Century Restaurants bought out two shareholders who no longer wished to remain active in the business, developed a holding company corporate structure that is conducive to future growth and successfully refinanced its debt with a nationally prominent bank active in franchise lending with a $12.2 million combined term loan, development line of credit and revolving credit facility. The terms of the new debt package are significantly more attractive than the terms of the previous debt that Century Restaurants had with multiple lenders. Chris Brown, President and CEO of Century Restaurants, was very satisfied with the transaction and invited Sherman Cohen, Jonathan Neville and Anish Gandhi, managing director of Brookwood Associates, and their wives for a weekend in Savannah to celebrate the successful closing of the transaction.