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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report July 28, 1999 Commission file number 0-3833
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MORGAN'S FOODS, INC.
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(Exact name of registrant as specified in its charter)
Ohio 34-0562210
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
24200 Chagrin Boulevard, Suite 126, Beachwood, OH 44122
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (216) 360-7500
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 14, 1999 Morgan's Restaurants of Pennsylvania, Inc., Morgan's
Restaurants of Ohio, Inc., Morgan's restaurants of West Virginia, Inc. and
Morgan's Foods of Missouri, Inc., all wholly owned subsidiaries of Morgan's
Foods, Inc. completed the acquisition of the assets of fifty-four (54) existing
KFC and Taco Bell restaurants and the land and building of a non-operating KFC
restaurant from various subsidiaries of Tricon Global Restaurants, Inc. for cash
in the amount of $33,740,000. This consideration was arrived at by negotiations
between the parties, giving weight to such factors as revenues, cashflows and
real estate values. The assets involved include land, buildings, leasehold
improvements, equipment, franchise agreements and inventories in West Virginia,
Ohio, Pennsylvania and Missouri, used in the operation of the forty-two (42) KFC
restaurants and twelve (12) Taco Bell restaurants. The Company intends to
continue to operate the fifty-four (54) properties as KFC and Taco Bell
restaurants under the franchise agreements which were assigned to the Company as
part of the asset purchase and sale transaction. It is also the intention of the
Company to reopen the closed KFC restaurant as a KFC/Taco Bell "2n1" restaurant.
Twelve of the KFC restaurants in Pennsylvania are KFC/Taco Bell "2n1"
restaurants. Revenues for the forty-three KFC restaurant properties (including
the non-operating restaurant) for the 12 months ended April 19, 1999 were
$34,100,000 and revenues for the twelve Taco Bell restaurants for the 12 months
ended April 20, 1999 were $7,300,000. Funds for the acquisition were provided by
Captec Financial Group, Inc. in the form of separate loans for each property.
The maturities of the loans range from 13 years to 20 years at fixed interest
rates and they are secured by substantially all of the assets which were
purchased. The following is a summary of the acquired restaurant locations:
Market Area Restaurants
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Pittsburgh, PA 26 KFC (incl. 12 KFC/Taco Bell "2n1")
12 Taco Bell
Wheeling, WV 7 KFC
(incl. 2 OH) 1 closed KFC
St. Louis, MO 9 KFC
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Financial statements for the acquired businesses as required for Form
8-K will be filed by amendment to this form on or before September 27,
1999.
(b) Pro Forma Financial Information.
Pro forma financial information for the acquisition as required for
Form 8-K will be filed by amendment to this form on or before September
27, 1999.
(c) Exhibits.
The following Exhibits are filed herewith and incorporated herein by
this reference:
Exhibit
Number Exhibit Description
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* 1 Asset Purchase and Sale Agreement dated April 30, 1999
* 2 Asset Purchase and Sale Agreement dated May 7, 1999
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* Exhibits to be filed by Amendment
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Morgan's Foods, Inc.
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(Registrant)
Dated: July 28, 1999 By: /s/ Kenneth L. Hignett
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Kenneth L. Hignett
Senior Vice President,
Chief Financial Officer & Secretary
