Denver-based Cibus Holding intends to acquire the assets of the shuttered Spicy Pickle sandwich shops as well as the franchising arm of the company during Tuesday’s auction.
The auction at the law offices of Davis Graham & Stubbs will likely result in a new owner of the embattled chain, which includes a company-owned store in Greenwood Village as well as 22 franchised restaurants in nine states, according to a Sept. 30 quarterly filing. The five franchised restaurants and the company-owned store in Colorado have remained operating throughout the company’s woes.
It’s not clear whether additional bidders will step forward.
According to Colorado secretary of state documents, the registered agent for Cibus Holding and its subsidiary is Patricia Stacey Reed, who with her husband, Presley, is listed as one of the lenders who was owed more than $4 million when Spicy Pickle defaulted on its loans Feb. 2.
Meanwhile, the aftermath of the Spicy Pickle company’s implosion has left the franchisees in a state of uncertainty. The Denver-based publicly traded chain of sandwich shops closed six stores Feb. 6, after defaulting on a total of roughly $4.75 million in loans.
Since that time, one franchise owner told me she has not been able to reach a representative of the company to find out where her business stands. Six stores in the chain remain open in Colorado.
Until she hears differently, Wendy Volmerg, a franchisee who owns the original Pickle at 988 Lincoln St., and the one in Aurora, says it’s business as usual. Other Colorado franchises that remain open are in Boulder, Fort Collins and one company-owned restaurant in Lone Tree.
Numerous calls to the 90 Madison St. headquarters last week were not returned. According to the most recent filing with the SEC, Spicy Pickle will put remaining assets (typically fixtures, furnishings and equipment) up for auction Tuesday at the Denver offices of Davis Graham & Stubbs.
Michael J. Katz, one of Colorado’s leading franchise attorneys, said that for the time being, franchisees are still beholden to the terms of the franchise agreement.
“It’s an interesting time for all the parties, and a terrible time for franchisees,” Katz said. “Technically until the contracts are terminated, franchisees are still on the hook. They’re required to perform under their contract. Just because (the company) is selling its assets does not mean it isn’t a franchisor.”
For her part, Volmerg said she’s continuing to make weekly royalty and advertising payments to Spicy Pickle corporate.
“If we heard back from somebody as to what the plan is, we would feel more confident,” said Volmerg, who is consulting a lawyer. “We’re operating as is, but it’s a day-to-day proposition.”
Katz said the most harm this volatile situation has done to the franchisees is to confuse consumers.
“The consumer base is reading this and saying, ‘Oh, I guess all Spicy Pickles are closed,” Katz said. “Then there’s no reason for me to go there tonight for dinner. They suffer from the negative press as much as they benefited from whatever the positive press was.”
Volmerg, who at one time owned five Spicy Pickle franchises but closed the three weakest performing stores, said she hopes the brand survives.
“I do believe we have a great product, and I do believe it’s salvageable if (the company) is handled the right way with the right people,” she said.
Exclusive. Denver’s coup of being the only U.S. city to snag the Yves Saint Laurent Retrospective March 25 to July 8 will likely bring big bucks to a town better known for Western wear than haute couture.
Fashion-focused Neiman Marcus in the Cherry Creek Shopping Center is piggy-backing on that exclusive event by bringing in the exclusive designer’s women’s ready-to-wear, shoes, accessories, scarves, jewelry and cosmetics starting today through Saturday.
“I know (the exhibit) will bring in so many people from so many cities and states,” said Neiman’s Denver spokeswoman, Nancy Sagar. “(Denver) is the only city getting it in the U.S. From that standpoint, I think the show will be amazing for business.”
Denver’s Neiman Marcus, which typically carries only YSL shoes and cosmetics, will expand its YSL line to include a huge collection of other merchandise from the designer for the one-week event.
Starting prices for a piece from the iconic French designer range from $75 for perfume to $795 for clothing, and go up dramatically from there.
“To have something YSL is very special,” Sagar said.
Eavesdropping A woman talking about a June party with another woman at The Palm:
“We didn’t send out save-the-date cards because we were afraid everybody would save the date.”
Penny Parker’s column appears Sunday, Tuesday, Thursday and Friday. Call her at 303-954-5224 or e-mail pparker@denverpost.com; follow her at .
What’s left
Spicy Pickle sandwich shops that remain open in Colorado
9360 Station St., Lone Tree
8000 E. Belleview Ave., Greenwood Village
2660 Pearl St., Boulder
13700 E. Colfax Ave., Aurora
2120 E. Harmony Road, Suite 101, Fort Collins
988 Lincoln St., Denver
