Frisch's Restaurants Inc. ( FRS - Snapshot Report ) recently inked an asset purchase agreement with NRD Holdings LLC for the sale of its Golden Corral operations in Ohio, Indiana, Kentucky, West Virginia and Pennsylvania. Financial terms of the deal are yet to be closed. Frisch’s is expected to seal the deal by the end of its fiscal year on May 29, 2012.

The company primarily operates under two segments namely Big Boy, a full service family-style restaurants, and Golden Corral—grill buffet style restaurants. The company used to operate 95 company-owned and 25 franchised Big Boy restaurants as well as 29 Golden Corral restaurants.

Toward the end of last year, Frisch's had engaged an investment banking firm specializing in the restaurant industry to evaluate the strategic alternatives related to its Golden Corral business segment and optimize the company's asset in that brand so as to enhance shareholder value. The latest deal was the outcome of that engagement.

Earlier, Frisch’s had shut down six underperforming Golden Corral restaurants on August 23, 2011. The company is believed to concentrate only on the brand Big Boy, which is much larger brand than Golden Corral. In the first half of fiscal 2012, Big Boy’s gross margin was 10.6% while Golden Corral’s was 4.5%.

We believe that after the transfer, Golden Corrals will be well handled as its new owner NRD Holdings has a proven track record of operating a variety of high-end restaurant brands including Popeyes, Checkers/Rally's and Domino's.

Frisch’s is not the only restaurant to streamline itself. One of its competitors Yum! Brands Inc. ( YUM - Analyst Report ) also divested its sluggish Long John Silver’s and A&W brands to concentrate more on its star performers like KFC, Pizza Hut and Taco Bell. There is also Wendy’s Co. ( WEN - Analyst Report ) , which dropped Arby’s from its name so that it can concentrate on its better performing Wendy's hamburger chain.