More than a year after its sale to a group hopeful for a comeback, the Big Boy restaurant chain is cooking up new locations and deals. But the year hasn't been without some strife.
Local investors bought the 84-year-old restaurant company's assets in October 2018 from longtime businessman Robert Liggett, who has since died. They have paid off $34 million in debt that was owed by the once-bankrupt chain, revamped menus and launched a new fast-casual concept. And as of Jan. 1, Southfield-based Big Boy Restaurant Group LLC has a new CEO, co-owner and board chairman Tamer Afr, after it parted ways with David Crawford in the fall.
Re-energizing Big Boy — iconic but now a fraction of its former self — was never going to be easy. It is down to 77 locations from 149 in 2009.
The group has four new Michigan restaurants in the pipeline: two multi-tenant developments at the Pasquale's restaurant site in Royal Oak and in Fraser for a collective $10 million, as well as new restaurants in Okemos and Muskegon. Plus, a Grosse Pointe Woods location closed by a fire more than a year ago is planned to reopen.
Afr, managing partner of Southfield-based A&A Management and an owner of the Fraser Hockeyland ice arena, said Big Boy sales have improved over last year. He declined to disclose figures.
The changes come amid litigation over the sale of Big Boy, though the new stewards of the brand don't expect it to dampen their expansion plans.
Big Boy's previous owner, radio station entrepreneur Liggett, bought the 455-restaurant chain out of bankruptcy in 2000. Liggett died the July after the sale to Big Boy Restaurant Group LLC, which included Afr, Crawford and others.
A lawsuit was filed in early December on behalf of Liggett's estate over contract issues, according to court documents and Justin Bagdady, an attorney with Ann Arbor-based Bodman PLC who is representing the seller. Bagdady and his client declined to comment further. The entities that sold Warren-based Big Boy Restaurants International LLC are registered with the state to Keith Sirois,who was the CEO before Crawford.
The complaint details disputes over $250,000 in escrow funds from the purchase price, which payment obligations belong to whom and who must pay tens of thousands in assorted fees. Big Boy Restaurant Group, the buyer, filed a counterclaim Friday. Both sides claim the other is responsible for liabilities, alleging they've suffered damages and want money back. The seller alleges more than $30,000 in damages in its lawsuit; the buyer would not disclose a figure.
The purchase agreement wasn't attached to public documents and Big Boy's general counsel, Altinia Kandrevas, declined to share it with Crain's.
"It is not uncommon for there to be disputes between buyer and seller with respect to escrow after the closing, but they also usually get worked out without the need for litigation," said I. W. Winsten, leader of Detroit-based Honigman LLP's complex commercial litigation practice group, who looked over the lawsuits for Crain's. "And when they don't get worked out and litigation results, it typically means there's something else going on."
Kandrevas said she doesn't see the lawsuit as "contentious" and hopes "we come to a resolution as quick as possible to avoid legal expenses and time."
"It's a contract issue that should be solved pretty quickly and amicably. They have their opinion as to what happened, we have my opinion ... We're just following the agreement," she said. "I get it, everyone sees lawsuits and they think lawsuits are scary, but Big Boy has done a lot of things in the course of 14 months that have really righted the ship. The team is reinvigorated, we are back on track and trying to innovate ..."
A new Big Boy restaurant announced in August for the former Pasquale's Restaurant site at 31555 Woodward Ave. is still moving forward, according to Big Boy leadership. The 65-year-old Pasquale's closed in April.
Big Boy plans to demolish Pasquale's and build a two- or three-tenant building. A 4,500-square-foot Big Boy would open there in the third quarter. Crawford previously teased Buddy's Pizza as a possible tenant, but all Kandrevas said Monday was that "nothing has been signed yet."
Big Boy's site plans still require Royal Oak city approval and have not yet been submitted, according to the city. The DelGiudice family that owned Pasquale's and is leasing the property to Big Boy confirmed through a spokesman that the lease is still effective and said they remain "confident" in the tenant.
Another two- to three-tenant development is in the works in Fraser on the property of Afr-owned Fraser Hockeyland. A third-quarter opening is anticipated for the hockey-themed Big Boy there. The 4,200-square-foot Muskegon, 3,900-square-foot Okemos and 4,700-square-foot Grosse Pointe Woods locations are set for second-quarter openings. Big Boy also has a deal with Southeast Asian franchiser Destination Eats.
Public relations firm Tanner Friedman Strategic Communications sued Big Boy's ownership in mid-December, seeking $7,900 in payments it said it had not received for three months of services in the fall. They settled Tuesday, according to Tanner Friedman co-founder Matt Friedman and Kandrevas, and agreed on full payment.
Friedman said his company started working with Big Boy in April and communication fizzled after former CEO Crawford left. Friedman said he sought repayment from vice president of marketing Julie Zurawka, who is also no longer with the company.
Crawford told Crain's via text message last week that he "left last year to go to work with another brand." He did not respond to a request for an interview. Afr declined to comment on the exact circumstances of Crawford's exit, aside from saying that change comes naturally with ownership transitions.
"With any transition, there's going to be some things that, unfortunately, get missed and need to get cleaned up," Afr said.
An example of that came last fall. Tanner Friedman's services included coordinating a promotion between Big Boy and a Southfield Public Schools program with nonprofit Blessings in a Backpack. The restaurant's newly opened fast-casual location at 26400 Telegraph Road in Southfield would donate proceeds from milkshake sales in September and October, according to the charity, a flyer and promotional materials on Facebook.
As of last week, Blessings in a Backpack hadn't received any money, according to Cheryl Whitton, Michigan adviser for the national children's food-access nonprofit. Crain's inquired with Big Boy last week about the payment, and Afr and Kandrevas said they were unaware of the promotion at that time.
However, Jon Maurer, Big Boy's vice president of marketing, told Crain's on Monday that he spoke with Whitton and pledged a $500 check — more than double the $141.10 in sales from milkshakes sold for those two months. Whitton confirmed that Big Boy would present Blessings the check on Jan. 22.
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