Get ready for a plucky new competitor in the mortgage business.
Feeling cooped up by limited growth prospects, the owners of a chicken restaurant franchise are expanding into the home loan business.
Linda's Flame Roasted Chicken, which operates five eateries in the Northeast, has converted part of its Cranford, N.J., headquarters into a lending center. This month it began advertising its new services.
The company, which is offering loans through a new subsidiary, National Home Guaranty, chose Philadelphia and Boston as its first markets and plans to enter New Jersey and New York this summer. The lender's menu: FHA and conventional home improvement loans.
"We feel the home improvement business has a lot of opportunity," said Peter Weissbrod, president of the chicken company and the home loan unit.
Linda's Flame Roasted Chicken decided to get into lending after losing $2 million, not exactly chicken feed, on restaurant operations last year. "We couldn't grow the chicken franchise part of the business quickly enough," Mr. Weissbrod said.
Fresh capital, in the form of a $900,000 private placement, is helping to incubate the lending venture.
Mortgage bankers, bemused by the thought that a chain of chicken restaurants is becoming a home lending company, offered good wishes and a few quips.
"My hat's off to them," said Robert M. Couch, president of Collateral Mortgage, Birmingham, Ala. "I hope they gobble the market up."
Another lender wondered if the principals were using the new company to "feather their nests."
But the expansion into home lending is not really that much of a stretch, given the company's management, Mr. Weissbrod said.
Richard Goldberger, chairman of Linda's Flame Roasted Chicken and Mr. Weissbrod's father-in-law, operated a company that restored home exteriors. He has also been a director of United Jersey Bank.
The company's chief operating officer, Stuart Fuchsman, has supervised housing construction as project manager for a New Jersey developer. And Mr. Weissbrod, while having a background in the restaurant business, said such responsibilities as site selections and overseeing remodelings have prepared him for the home improvement business.
Still, there are some unique individuals associated with Linda's Flame Roasted Chicken. Linda Weissbrod, Peter's wife and the namesake of the chicken company, serves as a vice president and director of marketing. In the early 1990s, she headed a company that analyzed handwriting samples, according to documents filed with securities regulators.
And Marc Roberts, a director of the company, heads an organization that manages professional boxers, the documents state.
Mr. Weissbrod acknowledges that the new venture, as a start-up, is far down on the pecking order of companies that operate lending programs.
But he is satisfied with progress so far. Radio advertisements in Philadelphia are generating 50 to 60 inquiries a week, he said.
The lending company is also working to stand apart from its rivals by offering distinctive services. After a loan is approved, the lender will recommend a contractor for the work, saving borrowers the hassle of lining up workers, Mr. Weissbrod said.