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Koo Koo Roo to close 10 stores in state

The cuts, part of a bankruptcy plan, will leave the chain three sites in California.

April 29, 2010|Sharon Bernstein

The long-troubled Koo Koo Roo restaurant chain planned to close 10 of its last 13 locations Wednesday night, its parent company said.

The stores are being closed as part of a bankruptcy reorganization announced last week by Magic Brands, the Austin, Texas, company that now owns Koo Koo Roo along with the Fuddruckers hamburger chain.

Dwayne Chambers, senior vice president for marketing of Magic Brands, said the chain will continue to operate three of its stores, those in Santa Monica, West Hollywood, and the Larchmont neighborhood of L.A..

Koo Koo Roo suffered from competition from other restaurant chains, confusion over frequent changes to its menu and the high cost of real estate leases in Southern California. The company sought to offer high-quality food, which made the restaurants expensive to run, Chambers said.

The three stores that will remain open have all been profitable, he said.

Last week, Magic Brands said that it would be sold to private equity firm Tavistock Group in Windermere, Fla., when it emerges from bankruptcy. The firm plans to close 21 Fuddruckers locations as part of the reorganization. The Koo Koo Roo stores to be closed are all in Southern California.

The storied local chain, founded in 1988 by entrepreneur Mike Badalian, appeared poised for national success in the 1990s with stores throughout Southern California and more planned up and down the East and West coasts.

The firm went public with hopes of expansion. A later purchase of struggling Hamburger Hamlet put still more strain on the company.

Koo Koo Roo filed for Chapter 11 bankruptcy protection in 2003 and was later bought by Magic Brands.

Magic Brands said that it planned to tell Koo Koo Roo employees Wednesday night that the stores were being shuttered immediately.

sharon.bernstein@latimes.com

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