Restaurants Unlimited To Split Up Cinnabon Will Be Severed From Restaurant Division

Restaurants Unlimited is splitting up its pots and pans, with its Cinnabon and restaurant units soon to be separate companies.

The privately held $210 million firm announced the split last week. Company founder Rich Komen will lead a group of investors that will buy the restaurant division, keeping the name Restaurants Unlimited.

Restaurants Unlimited Chairman and CEO Ray Lindstrom will take those titles at Cinnabon and Komen will be chairman of Restaurants Unlimited. Top management of each division will remain with the new companies, including Cinnabon President Dennis Waldron.

Komen started Restaurants Unlimited in Seattle in 1969, eventually selling part of it before leading a buyout group that reacquired the business in 1994. Its chain properties are Palomino, Cutters, Zoopa, Kincaid’s and Simon & Seafort’s.

In all, the company has 25 restaurants in 14 cities in Washington, Alaska, Hawaii, California, Minnesota and Pennsylvania. It plans continued expansion, with the fifth Palomino opening April 16 in Indianapolis, and more Kincaid’s and Zoopa openings on the front burner.

Lindstrom said the decision was made last October as it became apparent the two units had different management and capital needs. It wasn’t a case of too many cooks in the kitchen, he said, but more a case of each business needing a different recipe for success.

“They’re very good businesses, but needing different resources at different levels and at different times,” Lindstrom said. “It became apparent to us it was going to be more and more difficult to achieve that with a single board and a single senior management team.”

The restaurant division had about $90 million in sales last year.

The company started Cinnabon World Famous Cinnamon Rolls in 1985, a business that has boomed into 317 company-owned and franchised stores in 37 states, Mexico and Canada, with about $120 million in annual sales. Its stores are usually situated in shopping malls, airports and grocery stores.

Lindstrom said Cinnabon will continue to expand, with a new store opening planned every week.

“Cinnabon has a huge growth opportunity ahead of it,” he said.

Lindstrom said the parting is amicable, and Komen will remain a shareholder of Cinnabon.

“Physically and emotionally we’re running the businesses separately today,” said Lindstrom. He expects the split to be completed in May. Both firms will remain headquartered in Seattle.