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StratAmerica selling 10 Shari’s units

StratAmerica selling 10 Shari’s units

Alan Liddle

StratAmerica selling 10 Shari’s units

Shari’s, the 34-unit coffee shop chain purchased earlier this year by StratAmerica Corp., and headed by Sam D. Battistone, has reached a tentative agreement to sell 10 units scattered throughout the West to a company run by Battistone’s brother.

Sam D. Battistone was twice president of the now-defunct Sambo’s coffee shop chain that his father, Sam Sr., and Newell Bohnett co-founded in 1957. He is now president of StratAmerica, based in Salt Lake City. In addition to owning Shari’s, StratAmerica has a 50% interest in the Utah Jazz professional basketball team, is involved in publishing and is a co-franchisee of Steve’s Ice Cream of Utah.

StratAmerica has signed a letter of intent to sell the units and enter into a franchise agreement with Restaurants Etc. Inc. of Santa Barbara. Larry Hatfield, Shari’s president, said that with the assumption of liabilities, the sale price is about $1 million. Monthly royalty payments are a part of the franchise agreement, he said.

J. Roger Battistone, Sam D. Battistone’s brother, is president of Restaurants Etc., which owns and operates 14 restaurants in California, Arizona and New Mexico. Restaurants Etc.’s three concepts are the Bull Market Butcher Shop, Heidi’s Cafe and Bakery and Miki’s Family Cafe.

Selling off the 10 units in California; Arizona, Wyoming, Colorado and Texas would permit Shari’s management to focus its attention on Oregon and Washington, where 23 of the chain’s 24-hour units are located. While eight of the restaurants being sold are “profitable,’ Hatfield said, it has been difficult to manage them because of their distance from the company’s headquarters in Portland.

Hatfield said that in addition to the proposed franchise agreement with Restaurants Etc., Shari’s has a single-unit arrangement with an operator in Totem Lake, Wash.

“There are no plans at this time for more [franchise agreements],’ he said, indicating the remaining units and new units planned for the near future are, or will be, a reasonable distance from the corporate offices.

Battistone has said Shari’s might add up to five units during the next two years and now has four sites under consideration: two in Portland and two in Seattle.

There have been several major changes at Shari’s since StratAmerica purchased 87% of the chain for $3.3 million in February, Hatfield said. Included in the revamping was his appointment as president. The company had been without a president for some time and was being run by Kevin Adams, Shari’s executive vice president, who has since left.

Other changes:

Hatfield hired Larry Curtis, formerly of the Great American Restaurant Co. and most recently with Fiesta Enterprises, both of Santa Barbara, to be executive vice president. He also hired Stan Diemoz, formerly of StratAmerica and Sambo’s and still a consultant to Royal Foods Inc. of Japan, to be marketing director.

Middle management was increased from two district managers, Greg Kessler and Steve Merrill, to four with the addition of Steve Troike and Dennis Clairmont.

Food and labor costs were trimmed as a percentage of total sales. They are now about 31% and 26%, respectively.

New supplier contracts were signed.

Hatfield said that the chain has been revising its menu and that a streamlined version featuring more salads and seafood and, possibly, some pasta dishes should be out in October.

The average check is $3.25, and the average annual sales per unit is $875,000, he said. The breakfast shift generates the largest percentage of sales, followed by lunch.

Burgers are the biggest nonbreakfast sellers at a Shari’s.

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