published Thursday, March 22nd, 2012

Krystal sold to Atlanta investment group

The Krystal Building is located at the corner of Broad Street and M.L. King Boulevard.
The Krystal Building is located at the corner of Broad Street and M.L. King Boulevard.
Photo by John Rawlston.
The Krystal Co. Fast Facts:

Headquarters: Chattanooga, home to 700 corporate employees

Founded: Oct. 24, 1932

CEO: Fred Exum

Former owners: Summerfield K. Johnston, Probasco and Patten family members in Chattanooga and the Ingram family in Nashville.

New owners: Argonne Capital Group

Number of restaurants: 360 in 11 states

Employees: More than 6,000

Source: The Krystal Co.

Argonne Capital Group at a glance:

Headquarters: Atlanta, Ga.

Founded: 2003

Key people: Michael Klump, founder and president, and Karl Jaeger, managing director

Key investments: Excluding Krystal, the company owns more than 350 franchises and employs 10,000 workers at Ihop, Applebee’s and Stevi B’s Pizza locations nationwide.

Source: Argonne Capital Group

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An Atlanta-based investment firm has purchased The Krystal Co. for an undisclosed amount.

Krystal, famous for its small, steamed burgers and cheeky commercials poking fun at other fast-food mascots, will retain its headquarters in Chattanooga, according to a news release.

Argonne Capital Group sees “opportunity” in its acquisition, said Michael Klump, founder and president of the private investment group. The new owners plan to continue opening new company-owned restaurants, after the chain added 10 new restaurants in the past year.

“We have watched with great interest as Krystal has continued to develop quality products, offer outstanding customer service and maintain brand dominance through the recession,” Klump said in a statement today.

Argonne’s portfolio of restaurant companies includes more than 350 IHOP, Applebee’s and Stevi B’s Pizza restaurants, with more than 10,000 employees nationwide. The company also develops homes and invests in commercial real estate.

The Krystal acquisition will double the number of restaurants managed by the group to 710, and will increase the number of workers by more than half to more than 16,000.

Krystal initially sought a buyer in August 2011, when CEO Fred Exum said that former shareholders were seeking an “attractive exit.”

By October, Exum confirmed that Krystal was “halfway through the sale process,” as the company closed some underperforming locations and built new ones.

Exum now says that an important part of the transition was “finding the right owner, one that will continue to uphold the qualities of the Krystal brand that have made it a Southern icon.”

“Argonne recognizes the strength of the brand and provides a foundation for the Krystal family of employees and franchisees to continue its expansion by serving our loyal customers,” Exum said.

The 80-year old burger chain last changed hands in 1997, when Port Royal Holdings bought the company out of bankruptcy. Under then-president Phil Sanford, the company expanded to more than 420 stores, but was forced to close some locations during the recession.

In 2011, Krystal finished the year with increased sales, an increase in per-transaction sales, the company reported.

Krystal’s new board will include Michael Klump and Karl Jaeger from Argonne, as well Stockton Croft, the firm’s advisor. Harsha Agadi, former president and CEO of Church’s Chicken, will also join the board.

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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