Franchisees Delighted as Investors Buy Founder’s Share of Pioneer Take-Out
An investment group has taken control of troubled Pioneer Take-Out Corp. after agreeing to buy out the founder and owner of the fried-chicken restaurant chain for an undisclosed amount.
Pioneer Acquisition Corp., headed by former California legislator Terrence B. Goggin and investment banker Robert B. MacDonald, took control on Wednesday, the company said.
Goggin will serve as the company’s chief executive and Mac Donald as chief financial officer.
H. R. (Rick) Kaufman, who built the first Pioneer fried-chicken take-out store in Echo Park 26 years ago, “is no longer owner of the company and no longer involved in the management of the company,” said John Husing, who will serve as interim director of operations.
Kaufman could not be reached for comment on the transaction.
The acquisition of Pioneer, which has 240 franchised stores and 30 company-owned units, comes after recent declines in sales, intense competition and turmoil among Pioneer franchisees.
A group of franchisees that owns 44 stores has sued the company, claiming that it bought the franchises based on fraudulent information. The group also alleged that Pioneer funds were inappropriately loaned to some of Kaufman’s other businesses. Kaufman denied the charges and Pioneer countersued.
Franchisees Pleased
On Thursday, Pioneer franchisees said they were pleased with the new management.
“I’m so excited,” said Satish Desai, who, along with about 60 other fellow franchise holders, met with Goggin and Mac Donald last Friday. “The primary goal of the lawsuit was to get a change of management,” he said. “We achieved that.”
Desai said members of the franchisees are considering dropping the lawsuit against Pioneer. According to Desai, Goggin and MacDonald told the franchisees they will pump money into Pioneer, including $1 million more for advertising. Both were unavailable for comment Thursday.
Goggin, who served as a Democratic assemblyman from San Bernardino between 1974 and 1984, is currently a corporate attorney. MacDonald was a former partner in a Beverly Hills investment firm.
