Cracker Barrel is closing 16 restaurants and selling a chain

Cracker Barrel is making some big menu-sized changes. But don't panic, your roadside hashbrown casserole isn't going anywhere.

Instead, the restaurant chain is slimming down behind the scenes by selling off its Maple Street Biscuit Company business, closing 16 Maple Street locations, and cashing in on some of its real estate as it tries to cut debt and boost profits.

Maple Street is getting a new owner

Cracker Barrel bought Maple Street Biscuit Company in 2019, but it never became a major piece of the business. In fact, the fast-casual breakfast brand generated less than 2% of Cracker Barrel's annual revenue.

Now, Cracker Barrel has sold the Maple Street brand and assets tied to 35 restaurants to Biscuit Belly LLC, another breakfast-focused chain. The remaining 16 Maple Street locations will close rather than change hands.

Biscuit Belly is about to get a whole lot bigger

For Biscuit Belly, this is basically the restaurant equivalent of finding a rare expansion pack. The company currently operates just 15 locations, but buying Maple Street's restaurants will more than triple its footprint.

Over the next 18 to 24 months, Biscuit Belly plans to convert the acquired Maple Street locations into its own restaurants, starting around Greater Cincinnati and Richmond, Virginia. If everything goes according to plan, the chain expects to grow to more than 60 locations by the end of 2028.

Cracker Barrel also sold its buildings

Cracker Barrel completed what is known as a sale-leaseback involving 26 company-owned restaurant properties. That sounds complicated, but the concept is actually pretty simple. Cracker Barrel sold the buildings. It received about $77 million in cash. The restaurants stay open. Cracker Barrel now leases the properties from their new owner.

It's basically like selling your house to free up cash but continuing to live there by paying rent. According to the company, the move will help reduce debt without disrupting restaurant operations. It will also allow the company to narrow its focus back to its core Cracker Barrel brand.

The strategy comes after a rocky year for Cracker Barrel, which found itself at the center of an internet-fueled backlash over proposed updates to its branding and restaurant interiors.

Your favorite rocking chair isn't going anywhere

If you are a Cracker Barrel regular, there's no indication your neighborhood location is on the chopping block. The company still operates roughly 660 restaurants across 43 states, and these latest moves are aimed at improving its finances, not shrinking the flagship brand.

So while Maple Street Biscuit Company is riding off into the breakfast sunset, Cracker Barrel is betting that sticking to biscuits, country stores, rocking chairs, and nostalgic road-trip pit stops is still the recipe that works.

Source: Fox Business