Behind the Baja deal

One of the big topics of conversation at MUFSO, Nation’s Restaurant News’ annual conference for multi-unit restaurant operators, has been Wendy’s sale of Baja Fresh for a mere $31 million. To put it in perspective: Wendy's bought the chain in 2002 for more than $275 million.

Attendees in a position to know said the brand had been widely shopped around before Wendy’s agreed to sell it to David Kim, a West Coast entrepreneur described as MUFSO participants as operator of more than 100 Cinnabon franchised stores. They also noted that he’s been a franchisee of Pickup Stix, T.G.I. Friday’s Asian little sister, and franchises a flower-delivery service called Kabloom.

Persons close to the situation say other bidders were put off by the poor financial health of company stores; they speculated that would-be bidders figured they’d have to close dozens of corporate units, which would represent a considerable write-off. But, they said, Kim has vowed to keep the units open, apparently by pursuing a turnaround plan he’s yet to reveal.

Many noted that a number of franchisees are thriving despite the brand’s travails. And word surfaced of an alternative prototype, already in operation in Pennsylvania, that offers the key benefits of speedier service and a less-expensive design.