The new owner of K&W Cafeterias said Wednesday it plans to keep the 85-year-old brand alive and will consider re-entering cities and towns the restaurant chain left in the past three years.
K&W Cafeteria Inc., a Winston-Salem-based purveyor of Southern comfort foods, was sold for an undisclosed price to Louisiana-based restaurant chain Piccadilly.
Piccadilly has committed to keeping all 11 current K&W locations open, including the Winston-Salem restaurants at 800 E. Hanes Mill Road and 3300 Healy Drive.
A sign outside the K&W Cafeteria on Peters Creek
Azam Malik has been named as chief executive of K&W Holdings.
“It is with great excitement that we take this opportunity to work with a company that has been successfully family run for over 85 years,” Malik said.
“K&W Cafeterias carries with it an impressive reputation that has been built year after year by extremely hard-working team and family members.”
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K&W Holdings spokeswoman Callie Tucker said the new owner will evaluate expansion opportunities in the Carolinas and Virginia but plans to keep most of the K&W menu intact.
In August 2020, before K&W filed for Chapter 11 bankruptcy protection the next month, it closed restaurants in Chapel Hill, Goldsboro, Raleigh and Salisbury. It shuttered its experimental K&W Cafe in Clemmons in July 2019 and a location in High Point in January 2020.
“Our plan is to continue building upon this impressive legacy with the goal of expanding the K&W Cafeterias brand to reach as many customers and markets as possible,” Malik said.
Dax Allred, K&W’s president, said in a brief statement Tuesday that “after three generations of the Allred family operating K&W restaurants and serving our treasured guests, a new leadership group will continue the longstanding K&W tradition of serving homestyle, scratch-made food to our guests.”
“All cafeteria team members will have the opportunity to remain onboard, so rest assured you’ll see the same smiling faces on the line, the kitchens and our dining rooms,” Allred said.
Winston-Salem Mayor Allen Joines said that "it is always sad to see the ownership of one of our iconic companies move outside the city."
"K&W has been a key part of the fabric of our retail sector, and I hope the new owners will maintain the high quality of foods and service."
Not unexpected
The sale of K&W was not unexpected, given it was listed as option, along with its assets being put up for auction, when the company filed for Chapter 11 bankruptcy protection in September 2020.
Overall, since celebrating its 75th anniversary in 2012, K&W had shrunk from 35 restaurants to 18 at the time of the bankruptcy filing, including three in Winston-Salem and 14 in North Carolina.
K&W said it had 1,035 employees when it entered bankruptcy but was down to 834 as of a December 2020 filing.
After six months of failing to find a buyer and unable to secure what the Allred family considered an adequate bid for the assets, management reversed course in March 2021 and chose to keep 14 restaurants open.
A federal bankruptcy judge approved the final K&W reorganization plan in June 2021 and the company emerged from bankruptcy protection in September 2021.
Allred said when the reorganization plan was approved “although our geographic footprint has contracted, we look forward to operating K&W Cafeterias as a profitable, debt-free company going forward.”
In a related transaction, the K&W headquarters building in Winston-Salem sold for $984,500 to a Winston-Salem group, according to a Forsyth County Register of Deeds filing Monday. The 1.17-acre property at 1391 Plaza West Road contains a 7,981-square-foot office building.
When K&W closed the two Triangle locations, Allred told the Raleigh News & Observer that its business dropped off about 80% during Phase One of the COVID-19 pandemic statewide restrictions, which lasted from March 10, 2020, through May 22, 2020.
Phase One permitted only takeout and delivery sales.
Although Allred said K&W was able to regain some business during Phase Two, which allowed for limited indoor and outdoor service, it continued to struggle because its primary customers are elderly diners who were advised to stay at home during the pandemic.
