Unless Paz sells the Burger Ranch chain by the end of the month, it will probably merge all the branches it owns exclusively (as opposed to those on franchises). In any case, Paz is prohibited from selling the money-losing hamburger chain until December 24, when the Tel Aviv District Court debates the injunction not to sell the chain, issued at the request of its former CEO, Yossi Lubaton.
If Paz merges its branches, it will not be able to sell control of the floundering company, since the income tax law forbids selling more than 25 percent of it for two years after the merger.
Burger Ranch consists of some 30 different franchises. The company started at the beginning of 2003 to merge branches and received all the permits to do so.
A senior Paz source said the company will probably not sell Burger Ranch by the end of the year and is likely to proceed with the merger process and steps to put the chain back on its feet.
In recent months Burger Ranch began cutting back at company headquarters, closing branches and firing staff. The branch on Ibn Gvirol Street in Tel Aviv, near Rabin Square, which is the second one the company opened, is to close down, and a Pizza Meter branch will open there in its stead.
Sources at Paz said that it had received three offers for Burger Ranch, from Canada, England and Israel, though other sources said none of these offers had satisfied Paz on price or sale conditions. Apparently the Israeli offer was made by the Neto group, which denies it is interested in buying Burger Ranch.
Burger Ranch has 86 branches. The chain ended 2001 with a profit but lost some NIS 8 million in 2002 and is expected to end 2003 with a loss as well. According to Business Data Israel, the chain will reach sales turnover this year of NIS 144 million, down from NIS 192 million in 2002.
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