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Local Waffle Houses To Be Saved From Bankruptcy

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By MICHAEL SASSO

msasso@tampatrib.com

Published: December 18, 2008

TAMPA - It looks like the "scattered, smothered and covered" hash browns at Waffle House may have found a financial savior.

A major Waffle House franchisee in the Southeast, Northlake Foods of Brandon, has been under bankruptcy court protection for three months. The company owned 146 Waffle House restaurants in the South, including 90 restaurants in Florida, when it filed for Chapter 11 bankruptcy protection in September.

Waffle House Inc. now is proposing to buy Northlake's remaining 121 restaurants.

Northlake filed bankruptcy partly to hold off Waffle House Inc. headquarters in Norcross, Ga., which was threatening to terminate Northlake's right to operate Waffle House restaurants because it had failed to pay royalties.

Northlake has closed a number of its restaurants in recent months.

A federal bankruptcy court judge will need to approve the plan. Technically, Waffle House Inc. will create a new subsidiary called East Coast Waffles to operate the restaurants, said Waffle House General Counsel Jon Waller. Waffle House Inc. expects to offer jobs to all of Northlake Foods' restaurant employees, Waller said. Attempts to reach Northlake Foods and its bankruptcy attorney today were unsuccessful.

For a restaurant known for modest food and settings, Northlake Foods has a surprising ownership group.

One major owner is William B. Johnson of Atlanta, who became wealthy as a Waffle House franchisee. He later moved upscale by purchasing the Ritz-Carlton Hotel in Boston in 1983.

He eventually formed the Ritz-Carlton Hotel Co. and built it into a chain of luxury hotels before selling it to Marriott International in the 1990s.

Tribune researcher Michael Messano contributed to this report. Reporter Michael Sasso can be reached at (813) 259-7865.

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