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110 US KFC units of Kazi Foods (NY, NJ, FL, MD, MI) have been sold at auction, for $56.2 in total consideration, primarily via debt assumption. Cash proceeds were only $2.8M. The filing gives a glimpse of KFC sales and EBITDA in these markets: AUV of $973K and a EBITDA margin of only 7.8%
30 KFC units in these markets had been closed earlier. Kazi was the 12th largest franchisee in the US but retains other KFCs and other concepts elsewhere. Such a low store level margin makes it almost impossible to service debt and provide funds for maintenance CAPEX, and required remodels/upgrades.
With the net consideration paid of $56.2M and EBITDA of $8.6M, this rerpresents a price to earnings multiple of 6.5X. On the surface, this was a healthy price. But we understand there was real estate involved, thereby making the transaction a bit more diffcult to benchmark as purely a restaurant transaction.