The deal includes the Seattle's Best Coffee and Torrefazione Italia Coffee chains, although AFC will keep the Seattle's Best Coffee retail franchise business in Hawaii and existing markets outside North America.
Pay down debt
AFC will use proceeds of the sale
Frank Belatti, AFC's chairman-CEO, said the closing gives his company "an opportunity to improve our focus on growing our core business through franchising retail restaurants, bakeries and international cafes, in addition to further strengthening our overall cash position through the sale of these assets."
A franchisee group is said to have made an offer for AFC's Cinnabon chain, according to one executive. AFC said its policy is not to "comment on market speculation or rumors."
AFC is facing a class action shareholder lawsuit that alleging "materially false and misleading" financial statements.
Court filings to the U.S. District Court in Atlanta allege securities fraud by "failing to reveal that AFC had inflated its operating results" by improperly accounting for sales of company-owned stores to franchisees, value of long-lived assets and inventory at Seattle's Best, as well as understating advertising costs. That case is pending the selection of a lead plaintiff.