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Openings & Acquisitions

GNC to sell 84 company-owned stores

GNC to sell 84 company-owned stores

Paul J. Gough  |  April 28, 2016

GNC Holdings Inc. said Thursday it would be selling 84 company-owned stores to one of the country's biggest franchisers in a deal that will eventually lead to the Pittsburgh-based nutrition retailer selling off about 1,000 of its stores.

GNC (NYSE: GNC) disclosed in its first-quarter earnings report released Thursday that it would receive about $17 million from the sale to Sun Holdings, which does not yet own any GNC (NYSE: GNC) locations. It's a small slice of its 9,000 GNC stores worldwide, including 2,340 that are part of a store-within-a-store at drug store Rite Aid. But it's part of a larger effort for GNC to sell off 200 company-owned stores this year and 1,000 total.

The deal with Sun Holdings "is part of our strategic plan to transition approximately 200 company-owned store locations to an asset light franchise model this year and 1,000 company-owned store locations over the next three to four years," said CEO Mike Archbold in a statement Thursday.

A GNC spokeswoman didn't immediately have any more details about the transaction or the locations of the stores that were to be sold when the deal closes in the second quarter. GNC in the first three months of the year closed 69 locations, both franchise and company owned, and opened 30 new stores.

Sun Holdings is based in Dallas and is a franchisee that includes 600 restaurants including Burger King, Krispy Kreme and Golden Corral. It was founded in 1997 by Guillermo Perales and has grown revenue 50 percent a year since then,according to Perales' website. Entrepreneur magazine in 2012 called Perales one of the biggest restaurant franchisees in the U.S.

Meanwhile, GNC struggled with weakness in part of its business that led to what Archbold called disappointing quarterly results. GNC earned $50.8 million, or 69 cents a share, in the first quarter, compared with $63.3 million, or 72 cents a share, in the same quarter a year ago. Revenue declined to $668.9 million from $681.3 million a year ago. One of the issues was GNC's vitamin business, along with a 2.6 percent drop in same-store sales.

"We are not pleased with the reported results for the quarter and find them unacceptable. While we are making progress on our strategic evolution, which we started in 2014, the turnaround is taking longer than expected and the progress is insufficient," Archold said. "Our number one priority is our vitamin business and the steps we need to take to grow same-store sales in this category through new promotions and a renewed marketing focus. In addition, we are reducing the significance of aged inventory, optimizing our assortment and training store associates to emphasize the vitamin solution to our customers."

GNC also cut its outlook for 2016, and now expects to earn between $2.80 and $2.90 per share, down from $3.15 to $3.35 it previously expected.

"We are taking actions to offset the headwinds in our business by driving improvements in our vitamin category and our franchise business," Archbold said. "We also remain focused on driving improved business performance by successfully executing on our refranchising initiative, driving product innovation, and evaluating pricing opportunities that drive incremental gross margin dollars."

Article from The Business Journals.

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Krispy Kreme Franchisee Launches More Fast-Food Concepts

Krispy Kreme Franchisee Launches More Fast-Food Concepts

Laura Furr  |  February 5, 2016

Houston's Guillermo Perales has plans to open 15 more fast food chain locations in Houston.

Perales, who helped bring Krispy Kreme doughnuts back to Houston last year and is CEO of Turbo Restaurants LLC, reached a new development agreement with Atlanta-based Arby’s Restaurant Group Inc. on Feb. 4 to open the storefronts.

The restaurants will be rolled out around the city over the next 5 years. Arby's currently has only six locations in Houston. Perales and Turbo Restaurants also partnered with Arby's to open 15 new restaurants and remodel 12 in Dallas.

“Guillermo Perales of Turbo Restaurants is among a select group of premier franchise restaurant developers in the country, and we’re excited about his commitment to expand with Arby's in Texas," Greg Vojnovic, chief development officer at Arby’s Restaurant Group, said in a statement.

Perales, who is also president and CEO of Dallas-based Sun Holdings LLC, brought Krispy Kreme back to Houston in November 2015 to a great deal of fanfare.

The franchisee struck a deal with Krispy Kreme in December 2013 to open 10 Houston-area stores. So far, two have opened on Westheimer and Highway 6, respectively. Plans for locations at 3055 S. Loop W. near NRG Stadium and at 4061 Spencer Highway in Pasadena are also underway.

Article from The Business Journals.

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Krispy Kreme's return to Houston is finally here

Krispy Kreme's return to Houston is finally here

Olivia Pulsinelli  |  November 2, 2015

After a series of delays, the first Krispy Kreme location in Houston in nine years will open.

The location at 8611 Westheimer Road will open at 6 a.m. on Nov. 3, and people were lining up as early as 8 a.m. on Nov. 2, the Houston Chronicle reports. The second Houston location, at 5603 Highway 6 North, is set to open Nov. 17, according to the Chronicle.

North Carolina-based Krispy Kreme Doughnuts Inc. (NYSE: KKD) left the Houston market in 2006 after its franchise agreement ended. Franchisee Guillermo Perales, president and CEO of Dallas-based Sun Holdings, LLC. struck a deal with Krispy Kreme in December 2013 to open 10 Houston-area stores.

The Highway 6 location initially was expected to open in February, but that date was pushed back several times. In September, Perales told the Houston Business Journal he began to have doubts that the location had the space and supplies to solely satisfy the demand in Houston.

In addition to the Westheimer and Highway 6 locations, the next two to open will be at 3055 S. Loop W. near NRG Stadium and at 4061 Spencer Highway in Pasadena, Perales told HBJ.

Article from The Business Journals.

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Bizjournals.com: "Krispy Kreme operator aims to bring new concepts to Houston airport"

Bizjournals.com: "Krispy Kreme operator aims to bring new concepts to Houston airport"

Paul Takahashi  |  December 24, 2014

BizJournals.com reported today's announcement from Sun Holdings, Inc. president, Guillermo Perales, of a bid to open multiple new restaurant and concession locations in the George Bush Intercontinental Airport in Houston, including a mexican restaurant and a Burger King Whopper Bar. 

Perales pointed out that if his bid is accepted, he would be the first Hispanic operator in the airport. 

"There are over 2 million Hispanics in Houston. We hope (the airport) gives our company a chance," Perales told bizjournals.com

Read the full article at bizjournals.com

Sun Holdings, Inc. Announces South Texas T-Mobile Acquisition

Sun Holdings, Inc. Announces South Texas T-Mobile Acquisition

Sun Holdings, Inc. announced its acquisition of seven franchised T-Mobile retail locations from Killeen-based Jarbouh Enterprises. The two privately-held companies officially completed the transaction on July 1, 2014. The acquisition includes locations in San Antonio, Killeen, Temple, Waco, and Copperas Cove. The newly acquired stores come as an addition to Sun Holdings’ growing portfolio of T-Mobile franchises and are the company’s first T-Mobile locations found in southern Texas.

Sun Holdings Inc. is a National Franchise group that operates more than 400 units providing more than 12,000 jobs under 7 brands. As of January 1, 2014, Sun Holding’s system-wide Portfolio was comprised of 400 units operating in six states, with a major presence in over eight diverse concepts most of which are in the restaurant segment.

Sun Holdings, Inc. Acquires Three Krispy Kreme Units; 15 New Units To Come

Sun Holdings, Inc. Acquires Three Krispy Kreme Units; 15 New Units To Come

Sun Holdings, Inc. and Krispy Kreme have announced the acquisition and transfer of three corporate-owned Krispy Kreme locations in the Dallas/Fort Worth (DFW) metroplex to Dulce Restaurants, a newly created Sun Holdings subsidiary. In addition to the three acquisitions, Sun Holdings will also develop 15 new Krispy Kreme locations in the DFW market over the following five years. 

The acquisition signals the start of a new era for Sun Holdings and it's sole owner, Guillermo Perales. Perales is excited for this new venture and has great confidence in the brand.

"What an amazing opportunity, I'm very fortunate to be part of this new business relationship," Perales said. "My kids think Krispy Kreme serves the best doughnuts in the world and they ask to go to the stores daily."

The full Krispy Kreme press release can be found here.

Sun Holdings, Inc. Acquires 96 Florida Burger King Units

Sun Holdings, Inc. Acquires 96 Florida Burger King Units

Burger King Corp. (BKC) and Sun Holdings Inc. has announced the acquisition and transfer of 96 BKC-owned store locations to Sun Holdings' Florida subsidiary, Magic Burgers LLC. The deal brings Sun Holdings' Burger King franchise portfolio to 167 units in Florida and Texas. 

Guillermo Perales, the sole owner of Sun Holdings Inc, says he plans on remodeling 69 of the newly acquired locations with BKC's 20/20 store design over the next three years. Perales also plans on opening seven new Burger King locations in Florida, and ten new Burger King locations in Dallas. 

The full BKC press release can be found here.