Burger King’s second-largest franchisee is selling more than 240 restaurants. Al Cabrera of Miami is setting his sights on buying and building hotels.
Burger King’s second-largest franchisee, Heartland Food Corp. headed by Miamian Al Cabrera, is cashing out the majority of its business.
Heartland will close today on a deal to sell more than 240 Burger King restaurants to GSO Capital Partners. The cash deal with the New York hedge fund is for $155 million.
Cabrera, chairman and majority owner of Heartland, said the plan was always to turn around struggling restaurants it acquired over the past several years and sell them for a profit.
Heartland was created to buy up troubled Burger King restaurants, as franchisees across the country faced financial problems because of the company’s years of sales declines.
”It’s time to climb another mountain,” said Cabrera, who will still retain his original 10 Burger King restaurants in South Florida. “Our horizon was always three to five years. We’ve done a lot better than we expected. I don’t think anyone has come in at the bottom and gone out on top like we have.”
Cabrera’s Heartland team made its first major acquisition in 2003, when it paid $16 million for 131 restaurants owned by Burger King’s largest franchisee AmeriKing, which was selling off its restaurants as part of a bankruptcy liquidation.
After the AmeriKing acquisition, Heartland made another 22 acquisitions paid with cash flow from the business. In total, Cabrera says his group spent about $25 million on acquisitions, but the key was that the restaurants were bought for well below market rate at an average cost of less than $100,000 per restaurant.