4 Denny's eateries in Hawai'i up for sale

By Andrew Gomes
Advertiser Staff Writer

Financial trouble of a California-based restaurant franchisee has put four of eight Denny's restaurants in Hawai'i on the auction block.

The restaurants — in Lahaina, Kihei and Kahului on Maui and Kailua, Kona, on the Big Island — are among 10 of the familiar family dining eateries being sold to help pay creditors of Golden West Foods Corp. of Sherman Oaks, Calif.

Four other Denny's restaurants in Hawai'i are owned by Denny's Inc. and are not involved in the bankruptcy sale.

Golden West filed for Chapter 11 protection in U.S. Bankruptcy Court's Central California division in September, listing $7.2 million in assets and $10.3 million in debts.

Among the company's 20 largest unsecured creditors are nine Hawai'i companies, including landlords and suppliers owed about $450,000.

A court-appointed trustee has been operating the Golden West Denny's restaurants since October, and is overseeing the sale being brokered by National Franchise Sales, a Santa Ana, Calif., firm.

Michael Ingram, vice president of National Franchise Sales, said there is no asking price for the restaurants, which include leases and franchise agreements.

Offers are due Feb. 28. A follow-up auction to accept any last-minute high bids is scheduled for March 14.

Denny's Inc. spokeswoman Debbie Atkins said the company expects the four franchised Hawai'i restaurants will be sold to another independent operator, and that business will continue uninterrupted.

Ingram said he hopes someone familiar with the Hawai'i market will bid on the restaurants. He said Golden West, a former McDonald's franchisee that has been running Denny's restaurants for about three years, got into cash-flow trouble after expanding too quickly in distant markets.

Golden West owner Leighton Hull, board vice chairman of Denny's Franchisee Association, could not be reached for comment yesterday.

Golden West recently had 13 Denny's restaurants in Hawai'i, California and Indiana. Three restaurants were closed, and one was bought, leaving 10 for sale.

Ingram said Golden West's four Hawai'i restaurants had annual sales last year between $1.1 million and $2 million — $1.1 million in Lahaina, $1.5 million in Kihei, $1.6 million in Kahului and $2 million in Kona. Out of about 1,100 franchised Denny's, sales averaged $1.2 million last year.

"They're good businesses," Ingram said. "(Golden West) just got spread way too thin."