Archived postings from May, 2011...

The Owner Of Damon's Grill Goes Bankrupt

Posted: Tue, May 31, 2011 at 1:13pm (CDT)

Gary Reinert's financial problems didn't end when his bankrupt Max & Erma's chain was sold last year. The Pittsburgh-based entrepreneur, who still operates Ohio-based Damon's Grill, filed for personal credit protection early this month as his legal woes continue to mount. He also placed six other companies he owns into bankruptcy. ...continue reading.

Big Franchisees Are Getting Bigger

Posted: Fri, May 27, 2011 at 9:50am (CDT)

The big got bigger in 2010. That is the overarching conclusion of our annual Monitor 200, our ranking of the largest restaurant franchisees by total sales. Using cheap debt and an abundance of restaurants being put on the market by both franchisors and franchisees, the biggest operators added to their considerable girth last year. ...continue reading.

Is CPK Getting A Good Price?

Posted: Thu, May 26, 2011 at 10:07am (CDT)

California Pizza Kitchen has been on the block for more than a year, so when the company finally announced a deal this week with Golden Gate Capital for $470 million, or $18.50 a share, the prevailing opinion among analysts was that the price was fair, and about as good as CPK was going to get. But not everybody shares that opinion. ...continue reading.

Tim Horton's Boots Its CEO

Posted: Wed, May 25, 2011 at 9:37am (CDT)

Tim Horton's isn't usually near the top of any lists of restaurants  in need of leadership change, but the Canadian doughnut-and-coffee chain's board apparently thought so. This morning, the company announced that its CEO is leaving with the terse sentence: "Don Schroeder no longer serves as president and CEO of the corporation." ...continue reading.

The Buyout Boom Hits California Pizza Kitchen

Posted: Wed, May 25, 2011 at 8:06am (CDT)

California Pizza Kitchen finally got its price. The Los Angeles-based pizza chain announced this morning that it has agreed to be acquired by the private equity firm Golden Gate Capital for $18.50 a share in a deal that values the casual dining concept at $470 million.  ...continue reading.

Laughs, Laffer At The 2011 RFDC

Posted: Tue, May 24, 2011 at 5:11pm (CDT)

Not that we want people to look past the oncoming summer, but November is around the corner, and with it the Restaurant Finance & Development Conference in Las Vegas—Nov. 7-9 at the Wynn. This year's headliners should be a big attraction: the economist Dr. Arthur Laffer and the comedian Martin Short. ...continue reading.

Some Restaurants Shunning Daily Deal Sites

Posted: Sun, May 22, 2011 at 4:18pm (CDT)

The daily deal sites Groupon and Living Social have a big presence at the National Restaurant Association's Restaurant, Hotel and Motel Show in Chicago--through their gigantic booths on the exhibit floor, their presence on discussion panels, and their buzz among conference goers. But not all that buzz is necessarily positive. ...continue reading.

Commodity Prices Keep Hitting Restaurateurs

Posted: Sat, May 21, 2011 at 4:30pm (CDT)

People in the restaurant business must think that they're cursed. Rising commodity prices led to a food cost spike in 2008. They got a break only when the recession hit and demand for food fell so much that commodities went down. Now that business is picking up again, the weather gods are serving up a steady stream of floods and storms. Bad sales, sandwiched by bad commodity prices.

KFC At Odds With Another Big Operator

Posted: Thu, May 19, 2011 at 3:47pm (CDT)

KFC has again sued one of its biggest franchisees over unfulfilled store remodeling obligations. But this one is perhaps the clearest signal yet that relations between the brand and its franchisees are in the cellar. That's because the lawsuit was filed against JRN Inc., the Tennessee operation owned by John Neal, described by one observer as "the Patrick Henry of KFC franchisees." ...continue reading.

Is Perkins & Marie Callender's Headed For Bankruptcy?

Posted: Thu, May 19, 2011 at 10:24am (CDT)

Perkins & Marie Callender's acknowledged earlier this month that it missed an interst payment on $190 million in debt in April. The Tennessee-based owner of a pair of family dining chains said in a filing last week that it had reached a pair of forbearance agreements with its lenders. Those agreements expire at the end of June. ...continue reading.

Somebody Wants To Buy Sbarro

Posted: Thu, May 19, 2011 at 8:07am (CDT)

Sbarro, America's "least essential restaurant" that went bankrupt last month, is apparently being courted by a thus-far unknown bidder. The company this morning said that it is pursuing "strategic alternatives, including discussions with a qualified bidder who has indicated interest in acquiring the company."

Did Family Of Benihana's Founder Prevent The Chain's Sale?

Posted: Wed, May 18, 2011 at 4:53pm (CDT)

The family of Benihana's late founder, Rocky Aoki, apparently didn't want the company to be sold. That's according to a lawsuit that the Japanese steakhouse chain filed against the family trust, Benihana of Tokyo, and Aoki's widow, Keiko Aoki, in a Florida state court today. ...continue reading.

How A&W Tried To Be Sonic

Posted: Tue, May 17, 2011 at 4:27pm (CDT)

Despite some recent sales momentum, Sonic Drive-Ins hasn't recently conjured images of a concept that others want to replicate. Yet it wasn't long ago that the Oklahoma-based QSR was the envy of numerous competitors. One, A&W Restaurants, actively tried to mimic the chain's success with its own drive-ins. It failed. ...continue reading.

Are There Too Many Restaurants For Sale?

Posted: Mon, May 16, 2011 at 4:38pm (CDT)

It's getting increasingly difficult to keep track of the number of restaurants that are on the market right now. A buyer has plenty of options. Want a fast casual concept? Try Baja Fresh. Looking for something more upscale? How about Morton's? Or perhaps you're interested in a historic drive-in chain, in which case look at A&W. But are there too many concepts on the market right now? ...continue reading.

Benihana Picks The Other Strategic Alternatives

Posted: Fri, May 13, 2011 at 4:32pm (CDT)

Several months ago, Benihana said it planned to examine "strategic alternatives," including a possible sale of the company. Such announcements usually lead to a sale, and despite some controversies since then Benihana sure seemed headed in that direction. Apparently not. Or at least not yet. ...continue reading.

The Giordano's Bankruptcy Gets Tense

Posted: Fri, May 13, 2011 at 11:58am (CDT)

We always wonder whether there is any tension involved when a trustee is appointed to oversee a bankrupt company. The trustee gets control of the company, after all, and frequently has to work alongside the owners. We typically hear that the owners are "cooperative." Not so with Giordano's, the Chicago-based pizza chain that went bankrupt in February. ...continue reading.

Another Day, Another Restaurant On The Block

Posted: Fri, May 13, 2011 at 9:27am (CDT)

Restaurant buyers these days must view the acquisition market like a buffet: the options are bad to mediocre, but plentiful. Along that line, those buyers now have the option of an actual buffet company: Buffets Inc., which said in a short press release this week that it is exploring the infamous "strategic alternatives." ...continue reading.

Can Subway Expand To 65,000 U.S. Units?

Posted: Thu, May 12, 2011 at 2:07pm (CDT)

It's difficult to find a location in the U.S. that doesn't have a Subway, yet the ubiquitous sandwich chain and its franchisees somehow find them, to the tune that they still add hundreds of units a year even though Subway already has 24,000—or one restaurant for every 12,500 Americans. Yet there is, apparently, room for even more. ...continue reading.

Fertitta's Offer For MSSR To Get Equal Treatment

Posted: Wed, May 11, 2011 at 2:36pm (CDT)

We don't think that Tilman Fertitta and Landry's Restaurants will end up buying McCormick & Schmick's, but they should get a fair hearing. So says none other than Doug Schmick, the chain's co-founder and current chairman of the board, who told Fertitta in a letter this week that he would get equal treatment during the sale process. ...continue reading.

Granite City Gets Taken Over

Posted: Tue, May 10, 2011 at 4:31pm (CDT)

Concept Development Partners finally got its restaurant chain. The subsidiary of the Dallas-based private equity group CIC Partners has taken over control of the 26-unit, Minneapolis-based casual dining chain Granite City Food & Brewery in a complicated deal announced today. ...continue reading.

Arby's, Which Is Being Sold, Has A Sales Increase

Posted: Tue, May 10, 2011 at 3:27pm (CDT)

The Wendy's/Arby's Group today said that same-store sales at Arby's grew 5.5 percent in the first quarter, the best performance for the chain in a long time. That sales momentum continued last month, when sales grew 4 percent. The sales increases come just in time for Wendy's to sell the chain. ...continue reading.

Another Bankrupt Restaurant Heads To Auction

Posted: Tue, May 10, 2011 at 11:57am (CDT)

Restaurant buyers have yet one more opportunity to buy a brand on the cheap. This one is Mrs. Winner's Chicken & Biscuits, the bankrupt, Atlanta-based QSR chicken chain that Arlington Capital Advisors will be selling at an auction next month. But this chain's presence is only a fraction of what it once was. ...continue reading.

Goldman Sachs Buys Into An Applebee's Operator

Posted: Tue, May 10, 2011 at 9:01am (CDT)

UPDATED: Goldman Sachs is getting into restaurant franchising—again. GS Capital Partners, a private equity subsidiary of the bank, has made an investment in Apple American Group, Applebee's largest operator. The firm bought interest in the operator from Weston Presidio, which has been an investor in Apple American for six years. ...continue reading.

Daily Deal Sites Are Popular With Lawyers, Too

Posted: Mon, May 09, 2011 at 3:54pm (CDT)

We can think of few trends that have experienced a surge of popularity on the level of daily deal websites such as Groupon and Living Social. And it's not just customers and businesses that are lured to the sites: plaintiffs' attorneys are attracted to the sites like moths on a porch light. ...continue reading.

That Fly-Infested Popeyes Is For Sale

Posted: Fri, May 06, 2011 at 5:25pm (CDT)

Brokers and auctioneers who sell restaurants have an easier time selling them when they're still in operation, so we can't imagine how difficult it will be to get a buyer for a closed Popeyes in New York. The restaurant, in the city's Brooklyn region, is gaining infamy for its foul stench and fly-infested interior. Here's why: it's been shut down since March. ...continue reading.

Tilman Fertitta Declares Victory

Posted: Thu, May 05, 2011 at 10:02am (CDT)

Tilman Fertitta broke his silence yesterday on the McCormick & Schmick's board's decision this week to put the company up for sale. Fertitta called off his proxy fight, saying that it was no longer necessary, and said he planned to keep his $9.25-per-share bid open. But he stands to win even if he doesn't end up with the seafood chain. ...continue reading.

Competition Is Feeding The Lending Market

Posted: Wed, May 04, 2011 at 12:01pm (CDT)

Bank lending continues to ease. According to the Federal Reserve's Senior Loan Officer Opinion Survey, released this week, bank loan officers said their standards were either unchanged or eased somewhat in the first quarter, continuing a general improvement in the credit markets. Their reason for the eased standards: competition. ...continue reading.

Yup, Dunkin' Brands Is Going Public

Posted: Wed, May 04, 2011 at 9:35am (CDT)

We've been speculating for months that Dunkin' Brands would go public and several media outlets have reported that the company plans to do just that. On Wednesday, all of that rumor and speculation was confirmed when the Massachusetts-based franchisor filed its registration statement with the SEC. But the upcoming IPO isn't quite the exit we expected. ...continue reading.

Did Remodeling Requirements Bankrupt A KFC Franchisee?

Posted: Tue, May 03, 2011 at 12:41pm (CDT)

Another day, another KFC franchisee has declared bankruptcy. This one is a group of companies, based in California, under the names Wagstaff Management Corp. or D&D Food Management, that operate 77 units in Alaska, Idaho, California, Minnesota and Texas. And, perhaps not surprisingly, the company pointed a finger for much of its problems squarely at the franchisor. ...continue reading.

You Can Buy MSSR, Unless You're Tilman Fertitta

Posted: Mon, May 02, 2011 at 4:33pm (CDT)

Tilman Fertitta may never get McCormick & Schmick's, but that doesn't mean the company isn't for sale. Less than two weeks after wholeheartedly rejecting a $137 million buyout offer from the Landry's CEO, McCormick announced that it plans to put itself on the block, or explore "other strategic alternatives." ...continue reading.

Women Are Still Entering The Labor Force

Posted: Mon, May 02, 2011 at 1:56pm (CDT)

Much has been made of the halt in the percentage of women entering the workforce, and its implications for the restaurant industry. That percentage stopped growing early last decade, which in theory hurt restaurant sales by slowing growth in eatery demand. Yet those numbers are misleading. ...continue reading.