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IHOP franchisee files Ch. 11

Published:July 23, 2009, 6:48 AM

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Updated: August 21, 2010, 12:52 AM

An IHOP franchisee with three Buffalo-area restaurants has filed for Chapter 11 bankruptcy protection.

Pancake Partners LLC operates IHOPs in North Buffalo, Cheektowaga and Orchard Park, plus one in the Rochester area. All four restaurants remain in business.

Another local IHOP, on Maple Road in Amherst, is not owned by Pancake Partners and is not involved in the bankruptcy filing.

The four IHOPs run by Pancake Partners employ about 240 people, according to a court document. Mark J. Schlant, a Buffalo attorney for Pancake Partners, said the franchisee plans to continue operating all four locations during and after the restructuring process.

Schlant attributed Pancake Partners’ struggles to a combination of “growing pains” that came with buying and opening the locations, and a weak economy that has affected the restaurant industry.

“They like the Buffalo market and they’re happy with their stores here,” Schlant said. Pancake Partners still hopes to expand in the area once the restructuring is finished, he said.

In a court document, Schlant said the state Department of Taxation and Finance had threatened to seize the debtor’s business for nonpayment of taxes, and that the bankruptcy filing was made to “forestall that action.”

Jennifer Pendergrass, a spokeswoman for IHOP, a chain formerly called International House of Pancakes, said IHOP was aware of the bankruptcy filing but declined to comment on whether it was uncommon for one of its franchisees to take that step.

Panacke Partners, a father-son business team of Joseph and Brad Woodard from California, entered the market a few years ago after securing IHOP development rights in 15 counties in Western New York and Pennsylvania.

Pancake Partners initially bought two existing IHOPs, in Cheektowaga and Henrietta. It opened a new IHOP in Buffalo in 2007, and then coverted a former Kelsey’s location in Quaker Crossing in Orchard Park into an IHOP.

The addresses of the three area locations in the bankruptcy filing are: 50 Thruway Plaza Drive in Cheektowaga; 2236 Delaware Ave. in Buffalo; and 3500 Amelia Drive in Orchard Park.

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