WESTLAKE, Ohio -- Expecting to leverage its truckstop restaurant expertise, TravelCenters of America LLC has agreed to acquire out of bankruptcy the Quaker Steak & Lube automotive-themed casual dining restaurants and certain related assets for $25 million.
The acquisition includes existing restaurant operations, restaurant franchise program and bottled sauces for retail sale business. Quaker Steak & Lube, known for its "Best Wings USA", décor and original sauces, has more than 50 locations, most of which are franchised, in 16 states, with a concentration in Pennsylvania and Ohio.
On Monday, Sharon, Pa.-based Quaker Steak & Lube began proceedings for reorganization under Chapter 11 of the U.S. Bankruptcy Code and simultaneously filed in court the asset purchase and $2 million debtor-in-possession financing agreements with TravelCenters of America. Pursuant to the purchase agreement, TravelCenters of America has made a deposit toward the purchase price and has agreed to offer employment following the purchase to substantially all of Quaker Steak & Lube's current employees.
The agreements are subject to bankruptcy court approval processes, which the companies expect to be completed in early 2016, and other conditions, including an auction process supervised by the bankruptcy court.
As reported in a 21st Century Smoke/CSP Daily News Flash, TA intends to convert some of its existing full-service restaurants to the Quaker Steak & Lube brand while expanding the franchise program and the number of standalone company-operated restaurants into new and existing markets.
Also, it expects to benefit by expanding TA's customer base to include additional traffic from non-trucker motorists and in local markets and growing the profits at certain existing travel center restaurants.
The company said it believes its expertise operating full-service restaurants on a national scale that are consistently rated by customers among the top preferred truckstop restaurant brands, provides TA with the ability to build Quaker Steak & Lube into a nationally recognized brand and increase the profitability of its existing operations.
"Quaker Steak & Lube's unique brand and award winning menu is a great fit for TA's primary customers--professional truck drivers and highway motorists," said TA's CEO, Tom O'Brien. "We are confident that our existing foodservice operations will provide TA the tools it needs to make Quaker Steak & Lube a nationally recognized restaurant brand. By converting some of our existing full-service restaurants to the Quaker Steak & Lube brand, we will enhance the variety of food and hospitality options that our travel centers already provide to professional drivers at the same time that we expand the public awareness of the Quaker Steak & Lube brand. We also expect to expand the Quaker Steak & Lube' existing franchise program as well as its business of operating company owned restaurants separate from our travel centers."
Greg Lippert, CEO of Quaker Steak & Lube, said, "TravelCenters of America brings in-depth experience and resources to help Quaker Steak & Lube build upon our system's positive performance and help us fully realize our expansion goals. TA has stated its desire to use the existing company and franchisee Quaker Steak & Lube locations that it acquires as a core around which to expand Quaker Steak & Lube into a nationally recognized brand."
He continued, "We foresee a positive impact from these transactions to our restaurants. In fact, under TA, we're confident that the number of our locations will continue to grow and our franchise owners, employees and suppliers will benefit from a stronger Quaker Steak & Lube."
TravelCenters of America's 253 full-service travel centers operate under the TravelCenters of America, TA, Petro Stopping Centers and Petro brands in 43 U.S. states and in Canada. The facilities include diesel and gasoline fueling, restaurants, truck repair facilities, travel and convenience stores and other services. The company also operates 184 convenience stores, principally under the Minit Mart brand, in 11 states.
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