Cracker Barrel is selling restaurant properties and exiting its Maple Street Biscuit Company business as it works to cut debt and improve profits.
The Southern country-themed chain said Monday it sold the Maple Street brand and assets tied to 35 locations to Biscuit Belly LLC. Cracker Barrel will close the remaining 16 Maple Street restaurants.
In a separate move, Cracker Barrel also completed a sale-leaseback deal involving 26 company-owned locations, generating roughly $77 million in net proceeds.
The company plans to use the money to pay down debt while continuing to operate the restaurants by leasing the properties from the new owner.
“These efforts reflect the discipline we bring to managing our business and balance sheet as we position Cracker Barrel for long-term success and shareholder value creation,” Julie Masino, president and CEO of Cracker Barrel, said in a statement.
“Our sale-leaseback transaction will allow us to opportunistically reduce debt while monetizing a portion of our owned real estate at an attractive valuation.”
Masino added, “Divesting Maple Street sharpens our focus on the core Cracker Barrel brand and is expected to improve profitability.”
Biscuit Belly, which currently has 15 locations, said the deal will allow it to expand more quickly. It plans to convert the acquired Maple Street restaurants into Biscuit Belly locations over the next 18 to 24 months.
The first conversions will begin in the greater Cincinnati area and Richmond, Virginia. The deal will more than triple Biscuit Belly’s footprint and is expected to help the chain grow to more than 60 locations by the end of 2028.
“When we looked at Maple Street’s geography, footprints, and established teams, a light bulb went off,” Chad Coulter, co-founder and CEO of Biscuit Belly, said in a statement.
Maple Street accounted for less than 2% of Cracker Barrel’s annual revenue. Cracker Barrel said the sale is expected to improve adjusted EBITDA beginning in fiscal 2027.
Cracker Barrel expects to record between $37 million and $39 million in non-cash charges tied to the Maple Street exit during its fiscal fourth quarter. It also anticipates between $6 million and $8 million in additional cash costs.
The moves come as Cracker Barrel, which operates roughly 660 company-owned locations across 43 states, works to move past backlash over proposed changes to its logo and restaurant interiors last summer, including the removal of the “Old Timer” from its logo.
The company reversed course less than a week later following customer complaints.
Cracker Barrel told FOX Business it had no additional comment beyond its press release.