The sale was approved shortly after the auction by Judge LeifClark of the United States Bankruptcy Court for the WesternDistrict of Texas, San Antonio Division, with a targeted closingdate of December 31. After that, Bobby Cox Cos. will operate theSchlotzsky's franchise system as a privately owned company. Thesandwich maker, founded in Austin in the early 1970s, has been apublic company for nearly 10 years, but declared bankruptcy inAugust.

According to those familiar with the sale, a number potentialinvestors participated in the auction that took place Wednesday inDallas, driving the price of the sale up nearly 15% over thereserve price of $25 million. Sam Coats, Schlotzsky's interimpresident and CEO, plans to remain with the company for anunspecified transition period. Based on the total outstandingliabilities and creditor's claims of Schlotzsky's, it isn't clearat this point if any proceeds from the sale will be distributed toSchlotzsky's unsecured creditors, and none will be available forshareholders.

Cox, who began his career in 1961 by owning and operating asnack bar in Odessa, is unusual in the retail business, in that hiscompany is currently both a franchisor and a franchisee. The BobbyCox Cos. franchises Taco Villa, Rosa's Café & Tortilla Factory,and Texas Burger, all of which operate predominately in thesouthwestern United States. The company has been a franchisee ofDairy Queen and Peter Piper Pizza, and is currently a franchisee ofDippin' Dots. Cox also operates 36 franchised Blockbuster Videostores in 14 markets throughout the Southwest, in addition to hisrestaurant holdings.