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Eatery Chain 'Hot Dog On A Stick' Files For Chapter 11 Bankruptcy

LOS ANGELES ( — Carlsbad-based chain Hot Dog on a Stick filed a Chapter 11 petition in U.S. Bankruptcy Court in Los Angeles on Monday.

The company, known widely for staff in brightly-colored, striped uniforms and impaled corn dogs, said in a statement that it is seeking relief in order to reorganize and restructure its business.

Hot Dog on a Stick, which currently operates 93 locations, said that it plans to continue business as usual throughout the bankruptcy proceedings.

The company also said that, in addition to working to save money in the supply chain and in stores, it has made significant reductions to its corporate workforce and expenses, while trying to increase sales over the past year.

In addition to these continued efforts, HDOS said that it plans to work with its landlords in order to review and renegotiate leases, the vast majority of which are reported to have been written at the height of the real estate bubble.

"Like many mall-based businesses, HDOS signed some very expensive leases during the booming economy of the mid-2000s," CEO Dan Smith said. "In addition, declining mall foot traffic over the past several years has had a negative impact on sales at most company locations. We've been pursuing new leases in all locations and the Chapter 11 filing will allow us to do so in a more effective manner. The mall business is built around the relationships and partnerships between tenant and landlord. We want to be in malls where the relationship is positive and the partnership is mutually beneficial."

Smith said that, since the Hot Dog on a Stick brand has been strong and iconic for so many years, the initiatives of the company and cooperation of partners will allow them to emerge from the bankruptcy proceedings "in a position to thrive well into the future."

The first HDOS restaurant was opened by founder Dave Barham in 1946 as Party Puffs at Santa Monica Beach. The restaurant sold ice cream and lemonade, according to the company's website. Later, Barham used his mother's cornbread recipe to perfect the corn dog, and he changed the eatery's name to Hot Dog on a Stick, traveling with his product to county fairs. It was at these fairs that he got the idea for the colorful, eye-catching colorful uniforms.

Barham reportedly opened his first shopping mall restaurant in 1973 in Salt Lake City. He died in 1991 and left the company to his workers.

Hot Dog on a Stick operates under an employee stock ownership plan.

(©2013 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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