SouthEast Waffles LLC, which owns 113 Waffle House units, filedfor Chapter 11 reorganization in August after discovering what ittermed as "accounting irregularities," including nearly $3 millionowed in federal income tax. The Nashville, TN-based franchisee isworking with Atlanta-based Resurgence Financial Services LLC on arestructuring plan.

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In September, Tampa, FL-based Northlake Foods LLC also filedChapter 11 to halt Waffle House from kicking it out of the chain.Northlake has 125 restaurants, mostly in Central Florida but alsoin Georgia and Virginia. The company previously owned 146restaurants and claimed annual revenue of approximately $80million.

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Executives at Waffle House's Norcross headquarters declinecomment on the pending bankruptcies. An attorney representing thecompany in both cases, Philip Martino of DLA Piper in Tampa, didnot return a phone message before the weekend.

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Retail observers say the bankruptcies of the Tampa and Nashvillefranchisees do not appear to have hurt Waffle House's locationsoverall. The privately held chain, second-largest in the US behindDenny's Corp., has 6,000 employees and annual sales of $750million, according to the business information Web siteOneSource.

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Waffle House, which began near Atlanta in 1955, is famous forserving breakfast fare plus T-bone steaks and burgers around theclock every day of the year, including holidays. The chain hasworking jukeboxes in each of its 35-seat eateries, along withsignature menu items such as "scattered, smothered and covered"hash browns.

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