Restaurant Finance Across America
Archived postings from October, 2011...
Cosi Gets An Interesting New Board Member
Posted: Mon, October 31, 2011 at 4:28pm (CDT)
Cosi added a new board member late last week, but that board member is not Brad Blum. Instead, it's Stephen Edwards, whose background alone almost certainly raises questions about what's in store for the Illinois-based bakery-cafe chain. Edwards was a key figure in the 1999 split of Panera Bread and then-parent Au Bon Pain. ...continue reading.
Follow The Bouncing Economy Ball
Posted: Mon, October 31, 2011 at 11:06am (CDT)
The restaurant industry resumed its growth in September. The National Restaurant Association's Restaurant Performance Index, a monthly tracker of the state of the industry, returned to growth territory last month, following the broader economy out of a three-month malaise and ending—for now—fears about a second recession. ...continue reading.
Groupon Could Get IPOs Going Again
Posted: Fri, October 28, 2011 at 3:33pm (CDT)
The daily deal offering site Groupon is expected to go public next Friday, and that's good news for a trio of restaurant chains waiting in line for their turn to sell stock to the public. That's because Groupon's offering could ease the backlog of companies waiting to price their offerings. ...continue reading.
Investors Still Like Franchises
Posted: Thu, October 27, 2011 at 10:22am (CDT)
Looking for your stocks to outperform the market? Invest in franchises. That's according to the first "FRANdex," an index of publicly traded franchised companies recently published by the franchise information firm Frandata. The index found that franchises have outperformed the broader market since at least 2006. ...continue reading.
Blum Takes His Case To The Papers
Posted: Wed, October 26, 2011 at 4:52pm (CDT)
Brad Blum really wants to be the CEO of Cosi. The former chief executive of Burger King and Macaroni Grill first offered to be CEO for $1. Then he promised more than $10 million of investment would follow him. Now he's taking out advertisements in a pair of major daily newspapers to bring his case directly to shareholders. ...continue reading.
Underrated Panera Bread Laps A Weak Field
Posted: Wed, October 26, 2011 at 11:23am (CDT)
Panera Bread's stock is up in the double digits this morning, which is what happens on the day after a company reports 29 percent profit growth and 22 percent revenue growth. But its performance in the third quarter was even more amazing when you consider the monumental struggles of its many of its competitors in the bakery-cafe subsegment. ...continue reading.
Marcus Jundt Returns To Kona
Posted: Tue, October 25, 2011 at 4:46pm (CDT)
Marcus Jundt is returning to Kona Grill. The chain's former CEO, ousted two years ago amid struggling sales and shareholder unrest, has been appointed to the company's board on the same day that former Cheesecake Factory executive Michael Nahkunst was appointed permanent CEO. ...continue reading.
Do Half Of Americans Really Avoid Restaurants?
Posted: Tue, October 25, 2011 at 3:03pm (CDT)
The latest Statistical Abstract of the United States from the U.S. Census has some interesting tidbits, such as the one showing that Americans prefer chess to backgammon (3 percent played chess in the past year, 1.9 percent backgammon), but neither could hold a candle to scrapbooking, enjoyed by 6.7 percent. But if those numbers are to believed, then so is this: only 49.3 percent of us dined out in the past year. ...continue reading.
The Benihana Proxy Gets Increasingly Bitter
Posted: Tue, October 25, 2011 at 10:32am (CDT)
Benihana's largest shareholder, Benihana of Tokyo, on Tuesday accused the company of "outright lies" and of effectively trying to manipulate an upcoming re-vote on a controversial shareholder restructuring plan—a proposal that shareholders initially rejected in September. ...continue reading.
Quiznos Close To A Restructuring Deal
Posted: Fri, October 21, 2011 at 4:52pm (CDT)
Denver-based Quiznos is close to a deal with some of its lenders on a debt-for-equity swap that will push former CEO and owner Chairman Rick Schaden out of the company, sources told the Monitor. If the restructuring deal gets finalized, it would end one of the more controversial ownership tenures in franchising. ...continue reading.
Former Morton's CEO Is Looking To Score A Restaurant
Posted: Fri, October 21, 2011 at 10:45am (CDT)
Tom Baldwin wants to get back in the game. The former CEO of Morton's The Steakhouse is heading up a blank check company, called ROI Acquisition Corp., which is now raising money to take over, preferably, a restaurant chain. And he's enlisted a former high-scoring Kentucky forward to help him out. ...continue reading.
Restaurant Sales Prove Resilient
Posted: Fri, October 21, 2011 at 8:59am (CDT)
Yesterday, Chipotle Mexican Grill reported an 11.3 percent increase in same-store sales in the third quarter, which is about as surprising as a sunrise. Yet it continued a string of generally good restaurant industry sales reports, showing that consumers are apparently still eating out even in the face of economic uncertainty. ...continue reading.
Giordano's To Fetch At Least $26 Million
Posted: Wed, October 19, 2011 at 4:03pm (CDT)
UPDATED: Giordano's, the beleaguered and bankrupt Chicago-based pizza chain, is getting nearer to a sale and will fetch at least $26 million. According to a court filing on Wednesday, a company called Italian Food Network has been named the stalking horse bidder for the 45-unit pizza chain. ...continue reading.
Private Equity Still Has Money To Spend
Posted: Wed, October 19, 2011 at 11:36am (CDT)
The buyout market has slowed in the past several months, amid growing economic uncertainty, but that likely won't last. Private equity groups are still sitting on a huge pile of money—$937 billion, to be exact, according to a report this week from the London-based research firm Preqin. And much of that will have to be spent soon. ...continue reading.
O'Charley's Exchanges Debt For Rent
Posted: Tue, October 18, 2011 at 3:13pm (CDT)
Late yesterday, Tennessee-based casual dining chain O'Charley's announced a sale-leaseback of 50 units to STORE Capital, and plans to use the $105 million from that sale, plus cash reserves, to pay off debt. Analysts applauded the news, and investors gobbled up the stock, which is up 15 percent today. But the deal is not without its risks. ...continue reading.
News Of Chains' Death Has Been Greatly Exaggerated
Posted: Mon, October 17, 2011 at 4:52pm (CDT)
Is the chain restaurant dead? It is, according to headlines in The Week, the Washington Post and others. And it sure seems that way, given the number of restaurant chains that have gone bankrupt in recent weeks, which added to several other recessionary casualties. ...continue reading.
Argonne Buys More Applebee's
Posted: Fri, October 14, 2011 at 9:20am (CDT)
Argonne Capital is already IHOP's largest franchisee, with 260 units under various operating companies. On Friday, it became a big franchisee of IHOP's sister company, Applebee's, with the purchase of the 40-unit Apple Restaurants out of Atlanta. And Argonne got none other than Applebee's founder Bill Palmer in the process. ...continue reading.
Darden Spends Some Of Its Money
Posted: Wed, October 12, 2011 at 4:52pm (CDT)
In May, Janney Capital Markets analyst Mark Kalinowski made some noise by coming up with a list of potential Darden Restaurants Acquisitions. It included some interesting names, including the recently-gone-public Bravo Brio Restaurant Group, the should-be-public Yard House and the now-going-public Chuy's. None of them was the company that Darden actually will buy: Eddie V's Prime Seafood. ...continue reading.
Will Frisch Unload Its Golden Corrals?
Posted: Wed, October 12, 2011 at 4:27pm (CDT)
Frisch's Restaurants sure looks like it wants to get rid of its Golden Corral holdings. The Ohio-based company, a franchisee of the buffet concept that also operates Big Boy units, today said it has hired the investment banking firm Brookwood Associates to evaluate the infamous "strategic alternatives" for its Golden Corral segment. ...continue reading.
Sign Of The Times: Tax Incentives For Restaurants
Posted: Wed, October 12, 2011 at 3:37pm (CDT)
Restaurants aren't typically viewed as job creators. You don't see states doing battle to attract a TGI Friday's, and I've seen precious few governors digging up dirt at a McDonald's groundbreaking. Yet with so few industries adding jobs right now, perhaps that view might be changing, at least in the eyes of public officials. ...continue reading.
Build It, And They Won't Necessarily Come
Posted: Wed, October 12, 2011 at 2:51pm (CDT)
To hear some people tell it, the biggest hurdle keeping the economy from growth is capital access, but we still think that demand is by far the biggest problem. The latest evidence came from the National Federation of Independent Businesses, which yesterday said that more than a quarter of its members cited "poor sales" as their biggest problem. ...continue reading.
Could The KFC Bankruptcies Land At The Supreme Court?
Posted: Tue, October 11, 2011 at 11:11am (CDT)
It's funny how a two-letter word can cause so much havoc. The definition of the word "or" in a section of bankruptcy code has led to a divergence in the way franchisee bankruptcies are handled in different parts of the country. Now, a pair of KFC bankruptcies are in a race to settle that question in front of the Supreme Court once and for all, and the implications for franchises could be big. ...continue reading.
Nobody Wanted To Buy Sbarro
Posted: Fri, October 07, 2011 at 4:32pm (CDT)
So much for the idea that Sbarro would be sold. The New York-based pizza chain today submitted a new plan of reorganization with U.S. Bankruptcy Court in New York because, according to court documents, an auction set for late last month attracted no qualified bidders. ...continue reading.
Cosi Doesn't Think Much Of Blum's Moves
Posted: Thu, October 06, 2011 at 4:05pm (CDT)
Cosi last week told employees in a memo that Brad Blum was trying to take over the company, and today told Blum himself that he didn't understand federal securities laws. Well, how would you expect a company to react to an investor who wants to replace its entire board? ...continue reading.
Franchisors' Tax Bills Could Get A Lot Bigger
Posted: Thu, October 06, 2011 at 1:55pm (CDT)
Earlier this week, the U.S. Supreme Court refused to hear an appeal of an Iowa Supreme Court ruling in favor of that state's Department of Revenue, which KFC had sued over a $250,000 income tax bill on royalties paid by the chain's Iowa franchisees. And the result could mean some big, complicated tax bills for the country's restaurant franchisors—and not just from Iowa. ...continue reading.
Yelp Levels The Restaurant Playing Field
Posted: Wed, October 05, 2011 at 3:32pm (CDT)
Want to boost business at your independent restaurant? Get a positive Yelp review. That is the conclusion of a new study out of Harvard Business School, which found that a one-star increase in a Yelp rating can boost revenue by 5 to 9 percent and could even help take market share away from chain restaurants. ...continue reading.
Friendly's Goes Bankrupt, And Closes Stores
Posted: Wed, October 05, 2011 at 9:20am (CDT)
This isn't a good time to be a Sun Capital Partners company. Friendly Ice Cream Corporation this morning became the third Sun-owned restaurant to file for bankruptcy in a month—and the second one this week, following Real Mex's filing yesterday—and said it already has a stalking horse bidder in a proposed sale. The bidder? You guessed it: Sun Capital. ...continue reading.
Real Mex Declares Bankruptcy, And Is On The Block
Posted: Tue, October 04, 2011 at 9:41am (CDT)
Debt problems have finally caught up with Real Mex Restaurants. The California-based owner of Mexican chains Chevy's Fresh Mex, El Torito and Acapulco filed for bankruptcy this morning citing—stop us if you've heard this one—falling revenues and too much debt. The company also put itself on the block. ...continue reading.
Hooters Accuses Its Former Executive Of Theft
Posted: Mon, October 03, 2011 at 10:43am (CDT)
Here is a little bit of friendly business advice: When a person leaves your company, especially when the person is leaving for a direct competitor, make sure the worker can't keep signing onto his or her computer. This is a lesson Hooters of America is learning now—at least based on allegations of theft that the venerable Atlanta-based Breastaurant chain is making against a former executive. ...continue reading.