Schlotzsky's Seals $23.2-Mil Credit Extension, Allowing $6.2 Mil for New Shops

AUSTIN-Schlotzsky’s Inc., a deli restaurateur, has secured an agreement in principle to modify and extend bank credit terms for about $23.2 million with its banking group.

The banking group includes Wells Fargo, Frost National and Texas Capital banks. The largest component, long-term financing, totals $17 million and matures in 2004. The financing covers the purchase of area developer royalty rights completed in 1999. A short-term line of credit totaling approximately $6.2 million, used to develop new restaurants, will be extended to year-end, at which time the company plans to replace the short-term line with long-term mortgages. When the banking relationship originated in December 1999, the total amount of financing was $40 million.

Schlotzsky’s Inc., founded in Austin in 1971, is a brand licensor and franchiser of quick-service deli restaurants. As of June 30, there were 745 Schlotzsky’s Deli restaurants operating in 37 states, the District of Columbia and 12 countries.