Johnson-Led Team Buys Fatburger

A team of investors led by Earvin “Magic” Johnson will announce today their acquisition of Santa Monica-based Fatburger Corp. and plans for an expansion of the burger chain over the next five years.

Kenneth Lombard, president of Johnson Development Corp., declined to disclose the terms of the acquisition of the 47-store chain, founded nearly five decades ago. But he said the Johnson-led team had been eyeing privately held Fatburger for more than two years.

“We just thought it was a tremendous value, a tremendous brand and--above all else--had huge upside in terms of opportunities to have an aggressive roll-out plan for expansion across the country.”

Other investors in the deal, financed by GE Capital Franchise Finance, include Jheryl Busby--director of Founders National Bank and former president of Motown Records--and Darren Star, creator and executive producer of the popular HBO series “Sex and the City,” Lombard said.

The investors plan to open 100 stores in the next five years, with 80% of those corporate-owned and the remainder franchises, said Lombard, who serves on the company’s board of directors.

Shareholder Keith A. Warlick will serve as president and chief executive of the new corporation, the company said in a news release.

Johnson’s company, which has brought retailers into traditionally underserved neighborhoods, believes the chain will fare well in all kinds of neighborhoods.

“Obviously we can focus on inner-city areas but this is a great suburban concept too,” he said.