Refinancing a Restaurant Franchisee

Chat Inc. (Sonic)

Mississippi, Florida


21 location Sonic Restaurant franchisee. $20 million in sales. $15 million in mortgage debt.

  • Florida had suffered through four years of over 10% same stores sales declines.
  • Six banks, no bank group, no inter-creditor agreement.
  • Major bank holding $10 million had hard maturity and usage fees were mounting.
  • Given four years of same store sales declines of over 10% each year, Florida units were barely able to make contributions to mortgage debt.
  • Senior lender was seeking an exit and had a hard maturity.
  • Line usage fees and expenses were increasing the cost of debt service.
  • Global restructuring would require six banks to negotiate an agreement.
  • Management had talked to all of the current lenders and several regional banks and had not found anyone interested in a refinance.


  • MorrisAnderson was engaged to assist management with the development of a refinancing package and to seek alternative sources of funds.
  • A package of financial information on the company including projections and detailed analyses of store level profitability was quickly developed.
  • Several larger regional and national banks and financial groups that focused on franchise lending were brought in to review the package.


  • MorrisAnderson was able to use its national exposure to bring in five larger franchise industry lenders
  • The team helped the lenders understand a complex ownership and real estate organization.
  • The complete package of financial information and analyses allowed the national franchise lender quickly got up to speed.
  • Letter of Intent within two weeks, commitment letter at week eight and closing at eleven weeks with all title work, appraisals, surveys and Phase I’s completed.