Fresh Choice to Close 10 of Its 58 Outlets

Fresh Choice Inc., the chain of soup, salad and muffin outlets, plans to close as many as 10 of its 58 restaurants as part of a restructuring plan intended to improve cash flow and restore profitability, the company announced Tuesday.

Announcements of which outlets the Santa Clara-based company planned to close will be made locally when financial arrangements are in place and employees have been notified, Chairman Charles A. Lynch said.

It was not immediately known exactly how many jobs will be lost. Each restaurant has about 40 employees but the company will offer some workers the opportunity to move to other sites.

“Since we’re in a highly competitive business, we need to focus on those restaurants that have the best opportunity for profitable growth,” Lynch said. “We’re not going to hesitate to make tough decisions to maximize shareholder value.”

The company will report a one-time expense of $23.9 million, or $4.34 a share, in the quarter ending Dec. 31 as a result of the restructuring. In the year-ago quarter that ended Dec. 25, 1994, Fresh Choice earned $65,000, or 1 cent a share, on sales of $24 million.

The company said $13 million of the one-time expense will be the result of the closures. Also included will be $10.3 million from the write-down of assets at other restaurants and $600,000 for additional expenses related to the restructuring.

Fresh Choice has restaurants in California, Washington, Texas and Washington, D.C. They offer specialty salads, hot pasta dishes, soups, bakery products and desserts in a self-service format.