published Wednesday, August 3rd, 2011

Chattanooga-based Krystal restaurant chain up for sale

Krystal on Lee Highway
Krystal on Lee Highway
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    Staff photo by Dan Henry/Chattanooga Times Free Press - Pam Killelea serves a customer at the Krystal restaurant off Signal Mountain Boulevard on Friday.


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The Chattanooga company known for its small, steamed burgers is exploring a sale, the company announced today.

The Krystal Co., which owns or franchises 364 stores in 11 states, said it has retained a investment firm to find a buyer for the Chattanooga-based restaurant chain.

Krystal CEO Fred Exum said the company is seeking a new investor to take the company forward.

“The target is to deliver an attractive exit for current shareholders who have been tremendously supportive over the past 14 years, while also establishing a solid platform for our employees to further expand the brand by continuing to serve our loyal customers,” he said.

Port Royal Holdings, started by former Krystal President Phil Sanford who now heads Jackson Hewitt Tax Service, purchased the company out of bankruptcy in 1997. Krystal expanded to more than 420 stores in 2002, but closed stores and laid off employees during the recession.

Overall, Krystal has seen “significant growth since 1997,” Exum said, leaving the brand “well-positioned to continue its momentum.”

The company, founded in 1932, has more than 7,000 employees. It is unclear what effect, if any, a sale would have on jobs at the company’s Chattanooga headquarters.

“We have been extremely successful over the last 14 years, which is primarily due to the hard work of all levels of our management team,” Exum said. “Krystal is growing and we are excited about the future opportunities for the brand.”

Minneapolis-based Piper Jaffray, an international investment and asset management firm, will work with Krystal during the sale.

“The brand is well-positioned to continue its momentum and further leverage its historical equity and strong operational performance, presenting a compelling opportunity for a new financial sponsor,” Exum said.

Contact staff writer Ellis Smith at or 423-757-6315.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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woody said...

Wish I had the funds to swing it..Lord knows I love those little 'gut busters'. Someone could really ensure their future and the futures of many others with the right move here..Woody

August 3, 2011 at 1:15 p.m.
Marylutn said...

Love Krystal. I came from NJ where we had White Castle, so, same diff. Just ask for "no mustard, add ketchup." The only other problem I've had to overcome is getting them to STOP putting cheese on my burger when I don't ask for it and I don't pay for it either. They are losing money on that one. They don't seem to care though.

August 3, 2011 at 1:20 p.m.
tennstar said...

Am I the only one who has noticed the decline of the Krystal burger? More often than not they are undercooked. Soggy is one thing, but barely brown is another. The meat and onions have both changed for the worse. They even smell bad sometimes. I've eaten Krystals since they were 10cents apiece or less and dearly love them. However, it is rare when I get a delicious one anymore. Not surprised the company is for sale. Hopefully, the new owner will care about the taste and quality of their burgers again.

August 3, 2011 at 2:08 p.m.
dao1980 said...

Oh wow, those little Krystal burgers taste great and smell terrible.... both before and after you eat them.

August 3, 2011 at 3:41 p.m.
fiestyfelix said...

I completely agree with tennstar. The burgers have went down hill. I used to love them and now when my husband wants to get some to go, I get something from somewhere else. The meat hasn't tasted right in a long time and the onions aren't sweet anymore. I hope they go back to the original taste and texture with new owners.

August 3, 2011 at 4:16 p.m.
chatttn said...

Man, those "gut bombs" are awesome! The only complaint I've had is they are sometimes not freshly cooked. Gotta have the steamy bun for the full gut bomb effect. But they have all been well cooked. Ok, great, now I could really go for one...ummmm!

August 3, 2011 at 4:27 p.m.
eastridge8 said...

Love the Krystals! I have to have some every 2-3 months or so...then I get a dozen! Just hope they stay in Chattanooga...

I have not noticed any difference in them tho...maybe I will on my next "run".

August 3, 2011 at 4:34 p.m.
rosebud said...

You are so right. Krystal has really gone downhill during the past several years. The food is mediocre, and the service is dismal. As for cleanliness...I won't even go there. Hopefully the new owners can clean up the mess.

August 3, 2011 at 5:25 p.m.
NoMyth said...

I agree with tennstar, fiestyfelix and rosebud. This is food that people should not eat, is low quality, low nutritional value and is not good for you. You should not spend your money at this are getting what you pay for...not much.

August 3, 2011 at 10:08 p.m.
chattcitizen said...

What's wrong with you people? Krystal is a Chattanooga staple. Of course Krystals are not good for you, neither is mcdonalds, arby's, sonic, and every other fast food chain. There's a reason Krystal has survived and even more evidence that this city has relied on businesses such as Krystal to grow.

Be proud of the Krystal impact on Chattanooga!

August 4, 2011 at 9:52 a.m.
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