N.Y. Developers to Buy Restaurants From Irvine Firm

An Irvine-based restaurant firm has agreed to sell 107 of its 680 restaurants to the Riese Organization, a private New York-based company, for $200 million to $250 million in cash, the companies said this week.

Restaurant Enterprises Group is selling several of its chains, including Houlihan’s, Charley’s Place, Darryl’s and Bristol Bar & Grill. The sale also includes the Buena Vista Cafe in San Francisco.

The restaurants--situated in 25 states, including seven in California--are expected to have total sales of $265 million this year.

They are being purchased by Murray and Irving Riese, New York real estate developers and restaurateurs who started in the dining business as dishwashers in 1936. Today, the brothers own franchises of 25 national chains--including Roy Rogers, Kentucky Fried Chicken, Pizza Hut and Arby’s--as well as 60 other independent operations.

The purchase is part of a plan to expand the Riese Organization’s empire from 600 to 700 restaurants to perhaps 1,000 locations during the next five years, Murray Riese said Tuesday.

For Restaurant Enterprises, the sale will provide capital needed “to reinvest in our restaurant business,” said M. Michael Casey, the company’s executive vice president and chief financial officer.

Restaurant Enterprises was created in late 1986 when W. R. Grace & Co. sold a 53% interest of its 690-unit restaurant division to a management-led group for about $537 million. At the time, Restaurant Enterprises took on $775 million in debt, which included existing restaurant division debt.

Among the restaurants it retains are El Torito, Charley Brown’s, Coco’s, Carrows, Reuben’s, Baxter’s, RJ’s The Rib Joint and Gladstone’s 4 Fish.