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Prandium to Sell Hamburger Hamlet

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Times Staff Writer

Struggling restaurant operator Prandium Inc. has agreed to sell the Hamburger Hamlet chain to Los Angeles real estate investor Andrew Tavakoli for $10 million in cash.

In the fall, three of Prandium’s restaurant chains -- Chi-Chi’s, Koo Koo Roo and Hamburger Hamlet -- filed for bankruptcy protection. Three months ago Prandium sold Koo Koo Roo.

Irvine-based Prandium had been trying to sell the 13-location Hamburger Hamlet chain since 2001. Prandium had rejected multiple offers, including a $15-million deal last year by Latin Intellectual Properties, a group led by Brad Gluckstein, a partner in the Conga Room.

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However mounting pressure from Prandium’s creditors helped cement a deal with Tavakoli, said Brett Underhill, a former California Pizza Kitchen executive who has been hired by Tavakoli to help run Hamburger Hamlet.

Tavakoli plans to keep the restaurants operating under the Hamburger Hamlet name and eventually expand the chain, Underhill said. The deal is expected to close Friday.

“This brand has been around for more than 50 years,” Underhill said. “The plan is to rejuvenate the brand and bring it back to its former glory.”

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The chain was founded by Harry and Marilyn Lewis, who opened their first location on the Sunset Strip in 1950. One of the first casual dining chains, Hamburger Hamlet offered a wide range of menu items beyond gourmet hamburgers and developed a cult status. After the Lewises sold Hamburger Hamlet in 1988 it went through a succession of management and menu changes and its fortunes declined. Koo Koo Roo Enterprises, which later became Prandium Inc., purchased Hamburger Hamlet in 1997.

In its Chapter 11 bankruptcy filing in October, Hamburger Hamlet listed $50 million in debt. Last year, the chain had $30 million in sales, Underhill said.

Chicago restaurant analyst Ron Paul of Technomic Inc. said the neglected chain, which operates restaurants in California, Virginia and Maryland, faces some serious challenges ahead.

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“It’s a tired chain, with a tired menu, “ Paul said. Still, given its long history and familiar name, “it’s one of those brands that could be brought back,” he said.

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