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CHI-CHI'S ACQUIRES 22 RESTAURANTS OF FORMER FRANCHISEE

 CHI-CHI'S ACQUIRES 22 RESTAURANTS OF FORMER FRANCHISEE
 LOUISVILLE, Ky., Oct. 12 /PRNewswire/ -- Chi-Chi's Inc., operator and franchisor of the Chi-Chi's Mexican Restaurante chain, announced today that it will acquire 22 Chi-Chi's restaurants previously operated by Consul Restaurant Corp., the chain's largest franchisee.
 Chi-Chi's, a division of Foodmaker Inc., (NYSE: FM) will purchase the restaurants under a reorganization plan approved Friday, Oct. 9, by the U.S. Bankruptcy Court in Minneapolis. Consul filed for protection under Chapter 11 of the Federal Bankruptcy Act on Sept. 9, 1991.
 The transaction is expected to close the week of Oct. 19, following a 10-day appeal period. To complete the sale, Chi-Chi's will pay $8.7 million in cash to the court and assume $4 million in secured debt. Cash proceeds will be used to pay certain outstanding Consul debts to creditors and suppliers.
 "We are pleased to bring this issue to an end and anticipate a smooth, orderly transfer of ownership," said Ken Williams, president of Chi-Chi's. "We can now focus our attention on revitalizing these restaurants and ensuring that they provide the high-quality standards our Chi-Chi's customers have come to expect."
 The 22 Chi-Chi's restaurants previously operated by Consul are located in Minnesota, Wisconsin, Nebraska, North Dakota and South Dakota.
 This transaction will also terminate any interest Consul previously held with Chi-Chi's, including franchise rights to territories and other licensed products, Williams said.
 Chi-Chi's will initiate a refurbishment program for the former Consul restaurants, including upgrading facilities, introducing new menu items and enhancing employee training. Chi-Chi's expects to retain the estimated 2,000 Consul employees currently working in restaurant and field positions.
 With 223 restaurants in the United States, Chi-Chi's is the nation's largest full-service Mexican restaurant chain. Foodmaker Inc., based in San Diego, also operates and franchises the 1,155-unit Jack In The Box fast-food restaurant chain.
 -0- 10/12/92 R
 /CONTACT: Sheree Zizzi of Foodmaker Inc., 619-571-2248
 (FM) CO: CHI-CHI'S Restaurants ST: California IN: REA SU: TNM


ML-EH -- SD002 -- 8960 10/12/92 16:34 EDT
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Publication:PR Newswire
Date:Oct 12, 1992
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