Twenty-one of the restaurants are owned and six are leased locations. The owned locations were closed over this past weekend and the leased locations are expected to close during fiscal year 2017, the company said.
In all, restaurants in ten states are affected.
“Decisions to close restaurant locations are always difficult,” President and Chief Executive Saed Mohseni said in a statement. “Performance at each of these locations, despite the loyalty of valued guests and the efforts of our dedicated employees, was not meeting expectations. Employees impacted by closures have been offered positions in nearby restaurants where possible. In cases where relocation is not possible, severance benefits will be offered to full-time and part-time employees.”
The New Albany-based company expects about $20 million from the sale of the owned properties. Although the closed restaurants generated $30 million of annual revenue, the company believes annual operating income will improve by about $1 million.
The company will incur $7.5 to $8 million of expenses tied to the closures, with $6.5 to $7 million of the total expected to be non-cash charges, it said.
Bob Evans said it will provide an update of the estimated expenses related to the closures when it reports its fiscal 2016 fourth-quarter results in June.
Bob Evans Restaurants owns and operates 548 restaurants in 18 states, primarily in the Midwest, mid-Atlantic and Southeast regions of the United States.
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