Baja Fresh Debuts Irvine Eatery as Model for 300

Headnote

Mexican Chain's in Multiyear Restructuring

'David Kim is trying to breathe life into a floundering Mexican restaurant chain.

Kim bought Fresh Enterprises Inc., which operates 300 company-owned and franchised Baja Fresh Mexican Grills, in 2006 and has spent the past three years trying to spur a turnaround.

Wendy's International Inc., part of what's now Atlanta-based Wendy's/Arby's Group Inc., sold Baja Fresh for about $31 million, well below the $275 million Wendy's bought the chain for in 2002.

The fire sale price, according to Chuck Rink, president of Baja Fresh and sister brand La Salsa Fresh Mexican Grill, was because of Baja Fresh's "challenging" financial track record.

Baja Fresh posted operating losses for nearly eight quarters through 2005. Wendy's practically had given up on Baja Fresh when it sold it to Kim at the deep discount.

"Wendy's pretty much stopped advertising completely for Baja Fresh," said Jerry DeLucia, director of marketing at Baja Fresh.

Under Kim - who moved the chain's headquarters to Cypress from Thousand Oaks last year - Baja Fresh has started to regain some standing in the market as same-store sales have risen in the past three years.

In addition to more advertising, the company...