241 Pizza buys doughnut chain

The owner of the 241 Pizza delivery chain is buying doughnut maker Robin’s Foods Inc., with hopes of blending the two operations under a single roof in some locations.

The Toronto Star
March 2, 2000

241 Pizza buys doughnut chain
Afton group pays $19 million for Robin’s Foods
Madhavi Acharya

Will that be extra sprinkles or extra cheese?

The owner of the 241 Pizza delivery chain is buying doughnut maker Robin’s Foods Inc., with hopes of blending the two operations under a single roof in some locations.

Burlington-based Afton Food Group Ltd. is paying $19 million in cash and shares of the Robin’s franchise of 245 doughnut and deli locations.

The chains work well together in terms of “day-part sales,” Afton President Robert Macdonald said yesterday.

While doughnut and deli quick-serve restaurants are generally busiest from early morning until after lunch, the pizza business kicks in around dinnertime and goes until the wee hours of the morning.

Afton hopes to start installing 241 Pizza outlets into existing Robin’s shops about two months after the deal closes March 31.

The company hopes to have about 120 combined locations in three years, a move that will benefit Robin’s franchisees, said Pat Westfall, Afton’s chief financial officer. “For basically the cost of some pizza ovens, some signs and rolling pins, they can be in a second business.”

Lease restrictions may prevent the combination in some locations, he added.

Robin’s, headquartered in Thunder Bay, is well-established in Northern Ontario and Western Canada, Macdonald said.

“It gives us an excellent opportunity to expand our 241 Pizza chain very rapidly into Western Canada.”

The deal will give Afton 500 franchises, about 6,500 employees, and annual revenues of about $30 million. No layoffs are expected, Macdonald said.

As part of the agreement Afton will take on $600,000 of Robin’s debt, and pay $750,000 worth of Afton shares to its stakeholders. The rest of the purchase price will be paid in cash.


Risks: Franchisor sells out, Multi-tradename franchisors are often the most ruthless, Canada, 20000302 241 Pizza

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