SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): JANUARY 15, 1998
ADVANTICA RESTAURANT GROUP, INC.
(Exact Name of registrant as specified in its charter)
DELAWARE 0-18051 13-3487402
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
203 EAST MAIN STREET, SPARTANBURG, SC 29319-9966
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 597-8000
Former name or former address, if changed since last report:
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ITEM 5. OTHER EVENTS.
On January 15, 1998, the Registrant announced, as described in the
press release attached to this current report as Exhibit 99.1, that it had
signed a letter of intent to sell the subsidiary which operates its 557
franchised Hardee's units to CKE Restaurants, Inc., the franchisor of Hardee's
Food Systems, Inc, for approximately $415 million, which includes the assumption
of approximately $46 million of debt.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
Listed below are all Exhibits filed as a part of this current report.
Exhibit Number Description
99.1 Press Release of Advantica Restaurant Group, Inc.
dated January 15, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Advantica Restaurant Group, Inc.
By: /s/ Rhonda J. Parish
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Name: Rhonda J. Parish
Title: Senior Vice President, General
Counsel and Secretary
Date: January 21, 1998
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Contact: Karen Randall
(864) 597-8440
Larry Gosnell
(864) 597-8658
FOR IMMEDIATE RELEASE
ADVANTICA ANNOUNCES SALE OF HARDEE'S
SUBSIDIARY TO FRANCHISOR CKE
-Advantica to Use Sale Proceeds to Further Reduce Debt
and Invest in Company's Future-
SPARTANBURG, S.C., Jan. 15, 1998 -- Advantica Restaurant Group, Inc.
(NASDAQ:DINE) announced today it has signed a letter of intent to sell its
557-unit Hardee's franchise subsidiary to CKE Restaurants, Inc., the franchisor
of the Hardee's Food Systems, Inc., for approximately $415 million, which
includes the assumption of approximately $46 million of debt. The transaction is
expected to be completed by the end of the first quarter.
"The divestiture of our Hardee's restaurants at an attractive price is
an outstanding opportunity for Advantica," said James B. Adamson, chairman of
Advantica. "With the proceeds of this sale targeted for debt reduction and
future investments, this transaction provides us the opportunity to
significantly de-leverage our company."
The company will apply approximately $175 million from the proceeds of
the sale for debt reduction, and CKE will assume an additional $46 million of
debt obligations. After transaction expenses and other costs, the remaining cash
proceeds of approximately $170 million will be
-more-
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-2-
reinvested in existing restaurant businesses and possible future acquisitions of
other restaurant brands in the family or casual dining segment.
"As a franchisee of Hardee's, we did not have control over key aspects
of brand management such as advertising and product development," Adamson said.
"The sale of our Hardee's restaurants is a strategic move to own and manage all
of our restaurant brands."
Advantica also owns the Carrows, Coco's, Denny's, El Pollo Loco and
Quincy's Family Steakhouse restaurant brands. Hardee's is Advantica's only brand
where the company is a franchisee.
As part of the agreement, CKE will offer employment to Hardee's
restaurant and regional field employees of Advantica. The restaurants are
located in 10 Southeastern states.
"With CKE's focus on quick-service restaurants and its commitment to
the Hardee's brand, this is a win-win for both companies, Hardee's employees and
the customers they serve," Adamson said.
At closing, Advantica will withdraw its arbitration claim filed in
March 1997 against Hardee's Food Systems for failure to properly manage the
brand.
Advantica is the largest franchisee of Hardee's. The company's 1996
Hardee's revenues were $603 million. Revenues for the first three quarters of
1997 for Advantica's Hardee's operations were $417 million.
Advantica, formerly Flagstar Companies, Inc., is one of the nation's
largest restaurant companies with nearly 3,300 moderately-priced restaurants and
annual revenues of approximately $2.6 billion.
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