American Restaurants, a Ventura-based company that operates 26 Wendy's hamburger franchises in California, confirmed that it is negotiating with Butterfield Savings & Loan to buy Butterfield's 12 Wendy's franchises.
Although officials of American Restaurants would not disclose any details of their talks with the Santa Ana-based S&L, new Butterfield President Gerald McQuarrie said Tuesday that Butterfield's franchises, which are located mostly in Orange and Riverside counties, are worth between $3 million and $4 million.
"We are going to sell the Wendy's at a profit," McQuarrie said. "If not to them, then to someone else. It's a very desirable franchise located in lucrative, growing areas."
McQuarrie said Butterfield will also eventually sell off its 32 Love's barbecue franchises, in keeping with the wishes of federal banking regulators, who have chastised Butterfield in the past for using depositors' money to invest in restaurant ventures.
The Federal Home Loan Bank Board declared Butterfield insolvent Aug. 7 and reconstituted it as a federal mutual association under the direction of a government-appointed board of directors and with McQuarrie of Downey Savings & Loan as its president.
Butterfield acquired the first nine of its Wendy's in December, 1982, and has built another three since then. The operation did not become profitable until the first part of this year.
A spokesman for American Restaurants said that the company had started negotiating with Butterfield before it was seized by government regulators and that it hoped that the deal would be consummated in the next two months.
"We are in a tremendous expansion mode," said Steve Perlman, American's vice president of development. "They have the 12, and we are looking to operate all 12 of them."
In addition to its 26 Wendy's, which are spread out from San Luis Obispo to the San Fernando Valley, American Restaurants owns two Chuck E. Cheese pizza and family entertainment restaurants.
The 8-year-old company opened its first hamburger franchise in May, 1977, in Oxnard. It posted a net profit of $306,000 on sales of $18 million for the fiscal year ended Jan. 31.
Apart from the Wendy's that it hopes to buy from Butterfield, Perlman said that American Restaurants' plan includes opening about 15 Wendy's by next January.