Shoney's Restaurant Chain Sold To Chicken King

Deal is for the brand, not real estate

(Tuesday, January 02, 2007) - The largest franchisee of Church's Chicken is buying Nashville-based Shoney's Restaurants, a long struggling family-dining brand that was founded more than 50 years ago.

David Davoudpour, founder and CEO of Atlanta-based Royal Capital Corp., said today that an affiliate of his company was purchasing Shoney's from Texas-based investors Lone Star Funds, which has owned the company since 2002. Terms were not disclosed.
Shoney's has 282 locations in 18 states, 230 of them owned by franchisees, according to Davoudpour.
"As a long-time operator of food-service brands, I appreciate the passion for the Shoney's brand that we've witnessed among our franchisees and our loyal customers,'' Davoudpour said in a statement. "We all believe that Shoney's can be an even greater brand and can and will return to its glory days as an exciting food destination for millions of satisfied customers across the United States. This isn't just a financial transaction for me. This is a mission."
Shoney's had more than 1,000 restaurants in the early 1990s but suffered with its debt burden, changing leadership and competition from big casual dining chains such as Applebee's.
Shoney's North America Corp., a new subsidiary of Royal Capital, has acquired all of the trademarks and rights as franchisor of Shoney's restaurants as of yesterday, the company said.
Davoudpour, who owns restaurants and real estate, is chairman and CEO of Shoney's North America Corp.

Brentwood-based Centrum Equities, a private equity firm, had tried to buy Shoney's earlier this year but then sued to get out of the purchase contract.

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