Yum Brands announced Thursday it has reached deals with groups including franchisees to sell off Long John Silver's, which was founded in Lexington, and A&W.
The Louisville company announced in January that it was putting the chains up for sale to focus on its core brands — Taco Bell, Pizza Hut, KFC — and its international expansion.
"We are pleased to announce that we have identified strategic buyers who are passionate about these two great restaurant brands and committed to their growth potential," Yum chief executive David Novak said in a statement.
Acquiring Long John Silver's is LJS Partners LLC, a company led by a group of "prominent franchisee leaders and other investors," the statement said.
A&W will be bought by A Great American Brand LLC, which Yum said is led by a major franchisee with substantial interests in international A&W restaurants.
Financial terms of the deal, which is expected to close in the fourth quarter, were not disclosed. Yum executives could not be reached for further comment.
The two chains had been overshadowed for some time by Yum's larger brands. While Yum's brands have more than 37,000 restaurants worldwide, Long John Silver's and A&W accounted for just 1,630, or 4.4 percent, of them earlier this year. All of the latter are owned by franchisees, a point that was raised as part of a lawsuit by one of them last year.
Lexington-based Treasure Isles Inc. sued Yum, claiming the company fraudulently convinced it that co-branded Long John Silver's and A&W restaurants would be a success as opposed to the "abject failure" they became.
The suit came after Treasure Isles filed for bankruptcy protection in 2010. In the suit, which is ongoing, the company blamed its bankruptcy on Yum, saying the company failed to support the co-branded restaurants with marketing and struck a deal with a group of owners of stand-alone A&W restaurants that led to increased costs.
The first such co-branded restaurant of the two brands was opened by Treasure Isles in 2000, according to the suit. By 2009, the suit said, Yum stopped offering co-branded A&W and Long John Silver's restaurant franchises for sale. The suit also claims Yum sold 186 co-branded stores that it owned at "fire sale" prices and removed the A&W brand from all 100 co-branded A&W and KFC restaurants, too.
The ownership change will be the first for the brands in nearly a decade. Yum purchased the companies in 2002 and moved the corporate offices of both to Louisville from Lexington in 2003.
Long John Silver's history in Lexington dates to 1969, when a prototype Long John Silver's Fish 'n' Chips was built on Southland Drive. The company thrived for years under the ownership of Jerrico, which bought it in 1975. Jerrico also operated Jerry's restaurants and founded Fazoli's.
Jerrico was taken private in 1989 in a $626 million leveraged buyout, leaving Long John Silver's with $275 million in high-interest debt. The company struggled with the debt, and Long John Silver's sought bankruptcy protection in June 1998. A year later, A&W Restaurants, owned by a group of investors, bought Long John Silver's for $220 million. At the time, the two brands had more than 2,200 restaurants, about 600 more than they did earlier this year.