Red Robin Completes the Purchase of Federal Way Restaurant
Federal Way restaurant, and the Puyallup restaurant location, were the two remaining Red Robin restaurants to be acquired by Great Western Dining. The Company has operated these two restaurants under a management services agreement since July 10, 2006, when Great Western acquired the other 11 restaurants. The net proceeds paid at the final closing for the Federal Way restaurant were approximately $3.4 million USD, paid in cash.
The Company expects to complete the acquisition before the end of this year and expects to record a one-time charge of approximately $0.01 per diluted share in the fourth quarter. The charge will relate to the termination of the franchise agreement for the Puyallup restaurant as it operated at a royalty rate lower than current market rates. For accounting purposes, the financial results from all 13 restaurants have been consolidated in the Company's financial results since July 10, 2006.