Deal Puts a Koo Koo Roo With Every Pot

Koo Koo Roo Inc., a fast-growing Los Angeles-based restaurant chain, said Wednesday that it has acquired a small chain of do-it-yourself pottery emporiums in an attempt to combine dining with art.

Koo Koo Roo acquired Color Me Mine Inc., operator of four Los Angeles-area pottery studios where customers paint ready-made ceramics such as vases, bowls, goblets and platters.

The restaurateur plans to build four to six of the craft studios next to new Koo Koo Roos this year.

“Many Koo Koo Roo customers will find it fun to be able to go next-door and enjoy painting ceramics, and most of the Color Me Mine customers will eat before, during or after their visit,” said Ken Berg, chairman and chief executive.

Terms were not disclosed. Color Me Mine founders Robin Monroe and Josh Culver will maintain a 10% ownership and continue to operate the studios.

The new business combination is part of a broader Koo Koo Roo expansion. The company operates 18 restaurants, all but three in Southern California, and plans to open 30 more this year and as many as 70 in 1997.

The company plans to build most of them in California, but new restaurants in New York and Miami are also planned, and the company is considering sites in Washington and Denver.

The expansion will be financed by a $33-million private placement of preferred and common shares of Koo Koo Roo stock, a deal closed last week. Among those who have made separate investments recently is former Chrysler Corp. Chairman Lee A. Iacocca, who joined the company’s board in August.

The company has also expanded its menu from the original marinated skinless chicken and several side dishes, adding sandwiches and entrees such as turkey and garlic rotisserie chicken and more than 20 side dishes, Vice Chairman Donna Guido said.

The store expansion has taken a toll on the bottom line. Though sales more than doubled in the latest quarter to $6.4 million, Koo Koo Roo reported a loss of $2.7 million. It blamed the loss on expansion costs.

Same-store sales--revenue from restaurants open at least 12 months--rose 14% during the period, the company said.