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  • Sept. 11 sales declines push Mr. Gatti's franchisee to file for Chapter 11

AUSTIN, Texas -- A Mr. Gatti's franchisee is seeking Chapter 11 bankruptcy protection in the wake of post-Sept. 11 sales declines.

According to the Austin Business Journal, Austin-based R&E Systems Co. LLC, which owns several Mr. Gatti's restaurants in Texas and Kentucky, filed a bankruptcy petition Sept. 1.

R&E's bankruptcy also prompted Austin-based Foodservice Management Systems Inc. to seek Chapter 11 protection.

William Boone is president of both companies, and established Foodservice Management to manage a number of Mr. Gatti's pizza restaurants, including those owned by R&E. The exact number of stores owned by R&E and managed by Foodservice Management was not provided to the court, but the filing says Foodservice Management employs about 1,000 people.

Court documents indicate the Mr. Gatti's franchisee is saddled with $8 million of debt owed to Boise, Idaho-based Amresco Commercial Finance Inc., which loaned R&E $8.7 million three years ago. Another $1.9 million is owed to other creditors, primarily Texas-based food suppliers.

Most of the 200 or so Mr. Gatti's restaurants are franchised through Kerrville, Texas-based Mr. Gatti's Inc.

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