Restaurant chain pulls franchise rights for popular eateries

WASILLA — Several hundred Alaskans are out of work and local businesses are left holding the bag on thousands of dollars in unpaid bills after Chili’s Grill and Bar’s parent company Brinker Investments revoked Duke Investments’ three Alaska franchises.

The Wasilla store closed Friday and its sister stores in Fairbanks and Anchorage were closed Sunday.

“I can confirm Chili’s Anchorage, Fairbanks and Wasilla restaurants have closed,” brand spokesperson Julie Flowers wrote in an email late Sunday afternoon.

The closures came swiftly after a mid-February court filing by Brinker International seeking to terminate the franchisee rights previously held by Duke Investments.

Flowers said Friday that all three licenses granted to Duke Investments had been terminated, but did not explain why the stores in Anchorage and Fairbanks continued to operate on Friday and Saturday after the Wasilla store had closed.

A sign on the door of the Wasilla restaurant popped up Friday morning saying it is closed until further notice and will re-open soon under new management. The Chili’s in Anchorage and Fairbanks now feature similar signs.

Facebook posts and reader comments from former Chili’s employees indicate they were not notified in advance of the closing. Calls to the Anchorage and Fairbanks stores Friday evening indicated both stores were open and that employees were unaware of the pending closure.

Brinker International said it will try to help the newly unemployed Duke Investments employees find new employment jobs through brinkerjobs.com, the emailed statement says.

A June 2010 ruling penned by U.S. Bankruptcy Judge Herb Ross in a Duke Investments bankruptcy proceeding details the story of Chili’s in Alaska, starting with the Anchorage restaurant. That location had a remarkable opening, setting franchise records for new locations.

Duke Investments opened its first Chili’s in Alaska in Anchorage in 2002, next came restaurants in Fairbanks in 2005 and Wasilla in 2008.

Brinker believes in a synergy, or economy of scale, and the Fairbanks and Wasilla locations were opened at Brinker’s urging, according to the ruling.

The Fairbanks location was the least profitable of the three, described in Ross’ ruling as a “cash drain” with trouble finding good staff and management.

The Wasilla location seemed less problematic, but suffered from Duke Investment’s money troubles. In 2010, Duke Investments “had literally almost run out of time” to take care of the defaults on its Wasilla lease, the ruling says.

Wasilla businessman John Emmi owns the property at 3100 E. Parks Hwy., that Chili’s has leased since 2008. He said he and his brother, Ernest, are in talks with Brinker International to keep the franchise branding in place and reopen the eatery as soon as possible.

He said they’ve asked that Brinker either allow them to operate the franchise, or that they find another franchise owner to assume operation of the Wasilla restaurant.

For now, Emmi said, they are strictly the landlords. “We’re looking for a new tenant.”

He said the goal is to find a tenant in the next week or two so the 200 employees at the Wasilla location can keep their jobs.

“People that are out of work there are going to need to be back to work soon,” Emmi said Friday. “Today was the first day. There are a lot of unknowns.”

Attempts to contact David Duke of Duke Investments are ongoing.