Pancake House acquires Dencio’s franchise for P160 million

Pancake House Inc. is set to acquire the food services operations and franchises of Dencio’s Foods Corp. (DFC) for P160 million, the company told the Philippine Stock Exchange.

The deal will involve the acquisition of all intellectual property rights to the Dencio’s Bar and Grill Restaurant franchise system, Pancake House said.

In line with this, shares of Pancake House were suspended from trading effective yesterday pending disclosure of additional information on the acquisition of Dencio’s Foods Specialists Inc., the DFC unit which operates the restaurants and offers franchises.

At the same time, the board of Pancake House also approved the execution of a P150-million term loan agreement with the Metropolitan Bank & Trust Co. to partly finance the acquisition of DFC.

Owned by the Lorenzo family, Pancake House is engaged in the development, operation and franchising of a casual dining chain of restaurants. It has traditionally been associated with specialty pancakes and waffles and has likewise expanded to offer an array of popular international dishes such as spaghetti, tacos, and chicken.

Pancake House Inc. is targeting to open 11 stores this year as it plans to further strengthen its foothold in the casual dining industry. It plans to increase the numbers of its operating stores to 59 by the end of the year from the current 48. Most of its outlets, or 80 percent, are in Metro Manila.

Pancake House plans to open new restaurants in untapped territories like Bulacan, Pampanga, Baguio, Subic, Tagaytay, Laguna, Cebu and Davao.

The company posted a net income of P15.7 million last year or an increase of 39.2 percent from the restated income of P11.28 million a year earlier. For 2004, the company is projecting to earn P17.7 million.

Total revenues amounted to P315.46 million, up by 7.79 percent from the previous year’s P292.66 million.

Last year, Pancake House opened one outlet in Makati and subsequently closed down the SM Cebu outlet due to poor sales. The company also signed six franchise agreements, but terminated two in line with efforts to purge non-profitable businesses.

In the first quarter this year, Pancake House inked a joint venture with Happy Frens, an existing franchisee, to operate another store in Quezon City which is scheduled to open in the second quarter. The company also opened an outlet in El Molito, Alabang and a second outlet in Bulacan. It also closed a franchised outlet in the Sta. Lucia mall, bringing the total number of restaurants to 48, of which 20 are company-owned and 28 are franchised.