Company News

New Perkins Owner to Invest ‘Up to $1M’ in Renovations

YOUNGSTOWN, Ohio — The new owner of Perkins restaurants in the area will begin renovations on four stores that will bring overhauls “from the ground up.”

JDK Management of Bloomsburg, Pa., has acquired 13 Perkins restaurants previously owned by franchisee 5171 Campbells Land Co., which declared bankruptcy in July. Campbells Land Co. owned 15 restaurants in Pennsylvania, 10 in Ohio and one in New York.

“We own and will rebuild all [13 restaurants] to the highest standards so we can reintroduce them to the market,” said JDK’s vice president of operations Russell Berner Monday afternoon, noting that the renovation investment could be “up to $1 million per location.”

The first four restaurants to be remodeled are at 1953 Niles-Cortland Road, where renovations began Sunday, according to a statement from the company. A grand reopening is scheduled for Thursday.

Work will begin at the second Warren location, 3870 Elm Road NE on Nov. 3, followed by the Boardman restaurant at 804 Boardman-Poland Road Nov. 17 and the Austintown site, 5550 Interstate Blvd. on Dec. 1. 

“Those are the first four and then we’ll go to Erie, Pa., for the next one before Christmas. We’ll continue throughout the winter to remodel all of them through the spring,” Berner said. “[Renovations] include furniture, all the fixtures, some of the building and accommodations, some restrooms, everything cosmetic, inside and out. It’ll be like a new restaurant from the ground up.”

Service at the restaurants will be interrupted for “a few days” during renovations, according to JDK’s statement. Once work is complete, the restaurants will have an updated menu and JDK will “continue to invest heavily in training and development and hiring efforts,” the statement said.

JDK operates about 50 Perkins restaurants in Ohio, Pennsylvania, New York and Florida, and the acquisition of these sites fills a gap in its service area, Berner said.

“We’ve been in the business over 30 years and operate restaurants all across Pennsylvania, across Ohio into Cincinnati. These restaurants were a real fit into our markets,” he said. “We needed to hold them up and help keep our brand’s flag strong. We’re family owned and family operated, so we want to take good care of Youngstown guests that have relied on Perkins for so many decades.”

In late June, Perkins & Marie Callender’s LLC filed a temporary restraining order against Campbells Land Co. requesting that the franchisee cease operations at its 26 locations – 15 in Pennsylvania, 10 in Ohio and one in New York. 

Included in the filing were allegations that the franchisee, which took over the restaurants in April 2018 out of bankruptcy from the previous franchisee, had failed to pay $2.2 million in royalty fees, failed to make marketing contributions and did not complete construction projects required by Perkins & Marie Callender’s. It also stated that Campbells Land Co. purchased food from nonapproved vendors, sold nonapproved “specials” and “failed 16 quality assurances, including four failures of food safety.” Among those was the closure of the Grove City, Pa., restaurant by the Pennsylvania Bureau of Food Safety and Laboratory Services.

On July 2, a federal judge in Memphis, Tenn., granted that restraining order and barred 15 CLC restaurants from operating as Perkins, setting an injunction hearing for July 8. That day, CLC filed Chapter 11 bankruptcy in Pittsburgh two hours before the hearing. 

Then, on July 12, an expedited motion was filed requesting the appointment of a trustee to protect CLC creditors, including the Internal Revenue Service, $350,000; the Mahoning County Treasurer, $82,188.41; the Ohio Department of Taxation, $835,786; and the Pennsylvania Department of Revenue, $1.325 million.

CLC opposed the move, stating that when it filed for bankruptcy, it had “commenced extensive negotiations” with Perkins & Marie Callender’s to secure a temporary license to operate its restaurants. 

“In fact, [CLC] and PMC have already commenced negotiations with another Perkins’ franchisee to allow said franchisee to enter into new license agreements with PMC and to purchase the majority of the debtor’s assets,” documents filed with the U.S. Trustee’s office state.

Pictured: The Perkins restaurant on U.S. Route 224 is among the 13 purchased by JDK Management.

Related Coverage

Copyright 2019 The Business Journal, Youngstown, Ohio.