The owner of the Spokane-area Perkins franchises said the Monday bankruptcy filing of the chain’s corporate parent will not affect local operations, but added that news reports and the closure of the Spokane Valley Marie Callender’s are creating some heartburn.
Perkins & Marie Callender’s Inc. filed for Chapter 11 bankruptcy protection, brought down by tough competition, the weak economy and rising food costs.
The owner of the Perkins Restaurant & Bakery and the Marie Callender’s chains said in the filing it plans to shutter 65 stores and cut 2,500 jobs, or about 20 percent of its work force of 12,350.
The Marie Callender’s in Spokane Valley closed Sunday afternoon.
Nancy McDaniel owns two Perkins restaurants in Spokane, one in Spokane Valley, one in Ritzville, one in Coeur d’Alene, and four others in Idaho. All remain open.
Her company, Northwest Hospitality LLC, is the largest Perkins franchisee west of the Mississippi River, she said. The company employs 200.
Perkins restaurants in Moses Lake and Ellensburg are also independently owned, McDaniel said. The corporation owns no Perkins locations in Washington and only one other Marie Callender’s, in Federal Way, which also closed Sunday.
Washington’s high minimum wage, and assessments for unemployment insurance and workers’ compensation, make operating restaurants difficult, she said.
McDaniel said the wording of the press release announcing the closures of corporate-owned stores was confusing for local customers.
“We have had so much bad splash,” she said.
McDaniel said the local Perkins will accept job applications from displaced Marie Callender’s employees as the restaurants staff up for summer.
“It’s unfortunate that Marie Callender’s closed,” she said, adding that the employees were receiving outplacement help from the corporation’s Salt Lake City-based regional consultant. The employees were paid.
McDaniel, a former executive vice president at Sterling Savings Bank, said the corporate filing was a surprise but not entirely unexpected. The company had missed a debt payment, she noted.
Perkins and Marie Callender’s cited the weak economic climate, particularly in Florida and California, where many of its restaurants are located, for the bankruptcy filing.
Documents filed with the United States Bankruptcy Court in Delaware indicated the company could not afford to build new restaurants and upgrade existing ones, so it lost traffic to better-funded restaurant competitors.
The company has 160 owned and 314 franchised Perkins restaurants and 85 owned and 37 franchised Marie Callender’s.
Perkins & Marie Callender’s also runs a baker goods manufacturing division, Foxtail Foods, which makes pies, pancake mix and other items for its in-store bakeries and third-party customers.
Perkins, now owned by New York-based investment firm Castle Harlan Inc., was founded in 1958 and combined with Marie Callender’s in 2006.