MARIE CALLENDER INC. BUYS THE UTAH PIE FRANCHISOR ACQUIRES 6 TROUBLED EATERIES `TO MAKE THE WHOLE OPERATION BETTER'
Several Marie Callender restaurants in Utah have undergone another change in ownership - this time the franchisor has taken over the troubled pie shop-eateries in an effort to turn them around.
Six establishments in Salt Lake and Bountiful were acquired in an asset acquisition and debt assumption agreement, the terms of which were not disclosed, last week by Marie Callender Pie Shops Inc. of Orange, Calif.Beginning July 1, management directives have come from headquarters in Orange for restaurants located at 52 W. Second South, 1141 E. 39th South, 1313 Foothill Drive, 963 Fort Union Blvd., 406 S. Main in Bountiful, and 2875 W. 47th South.
"We aren't going to do anything drastic, just make the whole operation better" in Utah, said Darrell Burrage, vice president of development for the California-based parent company.
"The franchises had experienced several changes of control, causing some financial difficulties and an unstable situation," Burrage said.
The Utah franchises have been beset with problems in the last three years, beginning with their acquisition by a Colorado development company.
Turnmar Development Co., based in Denver and a former developer of the financially troubled South Towne Mall in Sandy, acquired 14 Marie Callender restaurants in several western states including Utah in 1985, but financial problems forced the firm a year later to turn several of them over to J. Samuel Parks - the man who brought Marie Callenders from California to Utah in the early 1970s and sold his franchises to Turnmar in 1985.
Parks organized a new franchisee, Parks-Craig-Olsen Inc., and a management team, Restaurant Concepts International, to restore the zest and respected reputation the popular family restaurants had earned under his ownership.
The plan worked, but problems continued to surface. Earlier in 1987, a federal judge fined the company $1,700 for ordering employees to falsify income withholding forms to cut overtime costs. Parks-Craig-Olsen also agreed not to hire illegal aliens - the group of workers who participated in the scheme.
While principals in Parks-Craig-Olsen maintained they didn't know about the overtime avoidance scheme, seven lower-level managers pleaded guilty to the charges and were placed on six months probation.
Despite the setbacks, Parks was able to revive the franchises to the level where Marie Callender Pie Shops Inc. believed turning establishments into company-owned outlets was a good move.
"As a group, the stores are viable and when the offer was presented we felt we could get an adequate return," Burrage said.
The acquisition also includes a restaurant in Spokane, Wash., and another in Arcadia, Calif.
He said he doesn't know of any plans to change management of the Utah outlets, but operations officials of the parent company are meeting with operators of the restuarants to facilitate the change in ownership.
Marie Callender Pie Shops Inc. is a subsidiary of Ramada Inc., based in Phoenix, Ariz., and franchisors and operators of hotels and gaming properties.
The first pie shop was opened in Orange, Calif. in 1964, and the restaurant-pie shop concept has grown into a chain of about 140 establishments throughout the western United States. Burrage said about half of the restaurants are franchises.
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