Hoping for a sale, Perkins & Marie Callender’s is finding the buyer’s market thin, according to a recent report from Debtwire. The parent company of the two brands, which operates 369 domestic Perkins and 48 Marie Callender’s Restaurant & Bakery locations, per its respective websites, launched the sale process February via investment banking firm Houlihan Lokey, the report said. It marketed itself off $15 million to $20 million in adjusted 2018 EBITDA.

But the process has been slow going. Two Debtwire sources familiar with the matter said the company recently tapped MorrisAnderson as a financial adviser to explore multiple options, including completing an auction within the parameters of a bankruptcy filing.

It’s a familiar process for struggling restaurant chains looking to change hands.

Kona Grill, for instance, has an auction hearing for its sale scheduled for July 26. It already has a bid led by two former chief executives, Berke Bakay and Marcus Jundt.

Bakay’s BBS Capital Fund L.P. loaned Marcus Jundt’s Williston Holding Co. roughly $2 million in the company’s “stalking-horse bid,” for $20.3 million. This also assumes $7.1 million in liabilities.

Joe’s Crab Shack, as part of Ignite Restaurant Group’s assets, was won out of a bankruptcy court action by Tilman Fertitta, head of Landry’s Inc., in July 2017. Per filings, his company offered $57 million.

Debtwire said Perkins & Marie Callender’s struggled to find a buyer due to its lack of growth, past issues, and a competitive operating environment, especially for legacy sit-down chains.

It attempted a sale in 2017, another source added. Two years prior, Perkins’ considered refranchising underperforming corporate locations—a strategy Steak ‘n Shake is currently undertaking as it hopes to move to a single-unit operator model, not unlike the one Chick-fil-A built its quick-service empire on. Steak ‘n Shake is so motivated to do so, in fact, it’s offering up franchises for $10,000. The 85-year-old chain announced in May it was temporarily closing 44 units “until such time that a franchise partner is identified.” The company’s same-store sales dropped 7.9 percent in the first quarter as traffic fell 7.7 percent. There are now 367 corporate and 213 franchised Steak ‘n Shake restaurants in operation. That compares to 415 and 201, respectively, as of March 31, 2018.

Debtwire said Perkins has roughly $100 million in debt. Bank of America and KeyBank are leading the process on the lending side.

Perkins & Marie Callender’s Inc. filed for chapter 11 bankruptcy protection in June 2011 after securing key creditors’ support for a plan to cut the company’s $440 million debt. It reported assets of $290 million in its bankruptcy petition at the time.

The company emerged that December with three members of Minnesota-based Wayzata Investment Partners LLC on the board of directors. Funds managed by the Wayzata-based private equity firm were now majority stakeholders.

Debtwire said the company exited bankruptcy with fewer stores and debt of $138 million.

A source told Debtwire that industry headwinds, including a shift in customer preference toward convenience-driven brands, was dampening Perkins’ performance. “One of the challenges the brand faces is that isn’t not adapting to consumer trends as well as its competitors like IHOP and Cracker Barrel,” Tanvi Acharya, middle market restructuring reporter at Debtwire, said in an email to FSR. “For instance IHOP has added burgers to their menu, alcohol at certain locations, and changes like that.”

Perkins & Marie Callender’s was formed in 2006. Affiliates of private-equity firm Castle Harlan Inc. combined Perkins Restaurants, founded in 1958, and Marie Callender’s, which was created in 1948.

The April before its bankruptcy filing, Perkins owned and operated 150 restaurants in 13 states and 314 franchised-run units in 31 states and throughout Canada. It owned and operated 85 Marie Callender’s restaurants in nine U.S. states and had 37 franchises in the U.S. and Mexico. Before the bankruptcy, the company said it launched a store-reduction program to shutter 65 of its company-owned locations—a move that would reduce its workforce by about 2,500 people.

ConAgra Foods, Inc., also purchased the Marie Callender’s brand trademarks from Marie Callender Pie Shops, Inc., for $57.5 million in June 2011.

Debtwire said Perkins recorded positive same-store sales and an increase in traffic, year-over-year, both in the mid-single digit range through May 30, according to a source.

How the compares to last year’s period wasn’t shared but the lack of growth remains an investor hurdle, Debtwire said.

Family dining remains one of the more dichotomous restaurant sectors. According to insights platform TDn2K, it was the only category to show declining revenue in 2018. While slight at negative .03 percent, it served as a stark contrast to industry-wide gains that covered both quick-serve and sit-down chains. Also, per TDn2K, average check at family dining venues stagnated last year and showed the least increase of any segment.

But there appears to be a pretty stark contrast between some legacy players and upstarts. Snooze, a 13-year-old company with 31 locations, is growing at roughly a restaurant per month in 2019 and already has 13 planned for next year, the company told FSR.

Keke’s Breakfast Club lifted its footprint 31 percent last year by adding 10 locations to get to 42, and had $66.6 million in total company sales. Famous Toastery upped 45.5 percent to 32 units (a growth of 10 restaurants), and posted sales of $30 million. First Watch claims to be the largest and fastest-growing daytime-only restaurant with more than 360 units in 32 states (more than 300 First Watch units and 55 The Egg & I stores, as well as one Sun & Fork). Black Bear Diner has 131 locations in 13 states and has been one of the fastest-growing full-serves over the last couple of years.

As Debtwire alluded to, IHOP is a legacy brand that’s made progress with recent innovations. The Steakburger launch was, of course, promoted by the IHOb campaign and recently was remarketed with a quirky, new message that calls burgers pancakes, and even has a pancake sandwiched on one option between two patties.

IHOP and Denny’s have found success through offbeat marketing as well as vast remodel programs and off-premises initiatives.

READ MORE: Denny’s, IHOP, and the changing face of family dining

IHOP turned in same-store sales growth of 1.2 percent in Q1, marking five straight quarters of gains. That outpaced the family-dining category, based on comp sales, by more than 150 basis points, according to Black Box data.

IHOP’s off-premises comp sales jumped 54 percent in Q1 and traffic outside the four walls boomed roughly 40 percent. That’s a dramatic change from a year ago when those figures were 31 and 22 percent, respectively.

Denny’s, which is in the midst of a refranchising program and revitalization campaign, reported domestic same-store sales growth of 1.3 percent last quarter. Off-premises sales represented about 12 percent of total sales, up from 7 percent at the launch of Denny’s On Demand in mid-2017.

Huddle House, dealt by private-equity firm Sentinel Capital to Elysium Management in February 2018, retracted its total unit count by 44 units to 349 locations, generating more than $240 million in annual systemwide sales, in the six years prior to the deal. However, the brand’s average-unit volume increased 14 percent during that run.

READ MORE: Why Huddle House is only getting better with age

It also posted it most impressive growth spurt in 15 years in fiscal 2017, signing 36 new franchise agreements to open new locations across the country, and entered new markets across 14 states.

Like IHOP and Denny’s, Huddle House is working through a remodel program called the “Evolution” design, which was about three-quarters complete last year.

On the other side, some legacy brands, with perhaps less scale and leverage to combat headwinds, like labor, are finding the climb steeper.

One example: Friendly’s revenue declined 11 percent in 2018 and shuttered 23 corporate units in April. In 1988, the brand had 850 locations in 15 states. This spring, Friendly’s was down to 173 restaurants, including 76 company-owned and 97 franchised, or roughly a 75 percent slice from its apex.

CEO John Maguire left in October 2018 and now George Michel, the former CEO of Boston Market, is directing Friendly’s comeback. The chain filed for bankruptcy in 2012. Read more about the turnaround plan here.