Red Barn rises from chapter 11: burger chain eyes fried-chicken sales in local food stores

Nation's Restaurant News, Sept 14, 1987 by Karen Bruno

Red Barn rises from Chapter 11

Burger chain eyes fried-chicken sales in local food stores

Red Barn Restaurants, a 15-unit hamburger chain that peaked in the early 1970s with more than 400 outlets, has emerged from Chapter 11 with plans to sell fried chicken through a local chain of food stores.

The long-struggling chain filed for bankruptcy protection in New York in January 1986 after a health food concept called Lite Stuff failed to improve declining sales.

Under Chapter 11, leases were canceled on defunct Red Barn units in New York, Virginia, Maryland, and Washington, D.C., and other leases were left to run out. A total of 36 units were jettisoned.

In 1983 Phillip Kahn, a New York restaurateur and current Red Barn president, bought Red Barn from General Development Corp., paring the company down to 33 company-owned and operated units from about 70 units.

Kahn said he was negotiating with the 61-unit, Rochester, N.Y.-based convenience store chain, Sugarcreek Stores Inc., to put in a chicken kiosk. Called Red Barn Chicken Pantry Kiosk, the new concept would open on a trial basis this month, Kahn said. Sugarcreek recently signed a licensing agreement with a Mexican concept, Tio Taco Corp., to add a line of made-to-order fast food to its convenience stores.

The privately held Red Barn grossed $6.5 million in fiscal 1987 ending March 30, Kahn said. "We expect to be profitable in 1988.'

Photo: A Red Barn before the company filed bankruptcy.