Brinker inks franchise agreement with ERJ Dining
June 01, 2007
by Eric Schroeder
DALLAS — Brinker International, Inc. announced a new franchise and development agreement with franchisee ERJ Dining of Louisville, Ky., under which ERJ Dining will acquire 76 existing Chili’s Grill & Bar restaurants and develop 49 new locations in the Midwest U.S.
With the ERJ Dining deal, Brinker domestic and international franchisees now have signed agreements to purchase 182 company-owned restaurants and develop 165 to 189 new locations over the next 10 years. Upon completion of these transactions, franchise ownership of Brinker brands will surpass the company’s initial goal to increase franchise ownership to 30% by the end of 2007. Brinker said it anticipates franchise ownership will further grow to 35% by the end of fiscal 2008.
ERJ Dining currently operates 25 Chili’s restaurants in Kentucky, Indiana, Illinois, Wisconsin and Missouri with four additional restaurants in development. Once terms of the expanded agreement are met, ERJ Dining will become one of the largest Chili’s franchisees in the country, Brinker said.
"ERJ Dining excels in operating restaurants and in growing our market penetration throughout the Midwest," said Todd Diener, president of Chili’s Grill & Bar. "We are thrilled with their confidence in the Chili’s brand and their increased investment in its future."
The transaction is expected to close by the end of 2007.
In a separate announcement, the board of directors of Brinker International authorized an increase of $300 million to its existing share repurchase program. So far this fiscal year, Brinker has repurchased $569 million, or approximately 17.5 million, shares.