Restaurant Finance Across America
Archived postings from November, 2011...
A Divided Economy, But Higher Expectations
Posted: Wed, November 30, 2011 at 11:56am (CST)
Restaurants' sales softened in October, but operators have higher expectations for the future. That was the conclusion of the most recent Restaurant Performance Index from the National Restaurant Association—which, when all was said and done, was largely unchanged from September. ...continue reading.
Diverging Views On Wendy's
Posted: Tue, November 29, 2011 at 2:09pm (CST)
We'll admit it: We love it when analysts' views of a restaurant conflict. So we've been taking a keen interest in the views on Wendy's turnaround, which seem to be all over the map. The latest view comes from Janney Capital Markets Analyst Mark Kalinowski, who is, shall we say, bullish. ...continue reading.
Convenience Stores Are QSRs With Gas
Posted: Tue, November 29, 2011 at 11:48am (CST)
Maybe Burger King should start selling cigarettes and gas. At least then the burger giant could play tit-for-tat against the oncoming competition from convenience stores—the latest threat to a restaurant industry that is facing mounting challenges in the post-recessionary world. ...continue reading.
Benihana Now Faces A Proxy Fight
Posted: Mon, November 28, 2011 at 3:50pm (CST)
The Aokis apparently aren't giving up that easily. The family of Benihana's colorful founder, Rocky Aoki, has quietly started a fight to gain three seats on the Florida-based chain's board, after the company successfully pushed through a stock reclassification that eliminated the family's status as Benihana's largest shareholder. ...continue reading.
On Fertitta's Shrinking Offer For McCormick & Schmick's
Posted: Wed, November 23, 2011 at 2:48pm (CST)
We won't be guests at Tilman Fertitta's house this Thanksgiving, but we can guess one of the things he's thankful for this year: McCormick & Schmick's initial resistance to his buyout offer, a resistance that ultimately saved him more than $5 million on the seafood chain. And now we know why the price fell. ...continue reading.
Six Crucial Tips For Using Daily Deals
Posted: Tue, November 22, 2011 at 2:21pm (CST)
We interrupt this restaurant finance blog to bring you this story about a British bakery owner who lost $19,500 in a recent Groupon campaign that forced her small staff of eight to serve up 102,000 cupcakes, according to the BBC. Judging from reports, it seems, the bakery owner made a number of crucial—but easily avoided—mistakes in crafting her campaign. ...continue reading.
Benihana Overcomes The Aokis
Posted: Mon, November 21, 2011 at 4:40pm (CST)
Benihana has a new top shareholder. The Florida-based chain of Japanese steakhouses managed to succeed—on its second try—in pushing through a stock reclassification proposal that effectively ended the leading ownership of the family of the chain's founder, Rocky Aoki, in favor of the hedge fund Coliseum Capital Management. ...continue reading.
Mrs. Fields Working On A Debt-For-Equity Swap
Posted: Fri, November 18, 2011 at 3:05pm (CST)
This must be an awful time for mall food courts. First Sbarro went bankrupt. Then Dippin' Dots filed for credit protection. Now this: Mrs. Fields Famous Brands, operator of fellow mall stalwarts Mrs. Fields and TCBY, said that it is working to refinance its debt by handing over the keys to the corporate office to its biggest creditors. ...continue reading.
Chuy's Ups The Size Of Its Offering
Posted: Thu, November 17, 2011 at 3:15pm (CST)
Chuy's apparently isn't going to let a little market instability keep it from raising money by selling stock. The Austin-based chain of eclectic Mexican casual dining restaurants has increased the amount of money it hopes to raise in its upcoming IPO to $92 million. ...continue reading.
Giordano's Stays With The Family
Posted: Thu, November 17, 2011 at 11:43am (CST)
The Chicago pizza chain Giordano's sold at auction this week for a total of $61.6 million, a price high enough that unsecured creditors should get some reimbursement. More interesting is the names of two minority investors in the company that won the bid for the chain: George and Basil Apostolou. Yes, those Apostolous. ...continue reading.
Buffalo Wild Wings To Buy Some Franchises
Posted: Wed, November 16, 2011 at 4:49pm (CST)
Refranchising is a big trend in restaurant franchising right now. Some concepts can't seem to unload company-owned stores to franchisees fast enough. Buffalo Wild Wings, apparently, is going in the other direction. The Minneapolis-based chicken wing chain announced today that it plans to buy 15 units in Ohio and South Carolina from franchisees. ...continue reading.
Biglari Finally Reveals His Cracker Barrel Ideas
Posted: Tue, November 15, 2011 at 9:58am (CST)
Sardar Biglari, the activist investor and chairman of Biglari Holdings, finally delivered his ideas for improving Cracker Barrel and, in typical Biglari fashion, it is long and filled with both brilliance and arrogance. In a letter to shareholders late Monday, Biglari calls the Tennessee-based highwayside chain an "A+ brand that has failed to achieve A+ performance." ...continue reading.
The Bitter Battle Over Cosi
Posted: Mon, November 14, 2011 at 5:09pm (CST)
Those of us in need of daily drama now that the soap opera is disappearing from the nation's television sets thankfully have Cosi's ongoing battle with the rogue shareholder and former Burger King CEO Brad Blum. The latest episode has everything you'd want in a shareholder fight: bitterness, accusations of manipulated economic data and general potshots. To name a few. ...continue reading.
Could Restaurants Jump-Start The Economy?
Posted: Fri, November 11, 2011 at 5:01pm (CST)
Consumer confidence has been intolerably low for entirely too long, and while restaurant and retail sales have shown some surprising recent strength, it still stands as the biggest hurdle between the industry and substantive growth. So what should the industry do? Hire a few people, pay them more, or both, at least according to one person. ...continue reading.
3G Capital Pays Itself A Dividend
Posted: Fri, November 11, 2011 at 2:52pm (CST)
Burger King this week said that its systemwide sales grew in the most recent quarter, its international business is growing, and that it is seeing some traction from its new product efforts, including soft-serve ice cream and a new premium burger. So it did what any other heavily indebted, private equity owned company with lots of aging stores would do: it paid its owners a dividend. ...continue reading.
Cosi Doing Its Best To Ignore Blum
Posted: Thu, November 10, 2011 at 5:07pm (CST)
Brad Blum is doing everything he can short of a true proxy fight to get the Cosi Board of Directors' attention, and Cosi is doing everything it can to ignore him. The company didn't mention Blum's name during a conference call this afternoon, and then abruptly ended the call after questions began heading in that direction. ...continue reading.
Multiple Perspectives On Managing Food Costs
Posted: Tue, November 08, 2011 at 6:30pm (CST)
Morton's Restaurant Group faced a pretty tough problem this year when the company's beef costs rose by an average of 10 percent, a steep price for a concept that sells so much beef. Yet thanks to its "price elasticity," the company was able to pass those costs dollar-for-dollar to the customer. That's quite a contrast to what Del Taco had to face. ...continue reading.
On Ken Calwell, Papa Murphy's And Brand Focus
Posted: Tue, November 08, 2011 at 1:58pm (CST)
Ken Calwell, who today was named the CEO of Washington-based Papa Murphy's, is stepping into one of the most competive sectors of the restaurant industry, pizza. Not only does his company compete with traditional pizza chains, it competes with grocery stores and Costco, all of whom have their own take-and-bake pizzas. So how does the chain thrive? Focus, he said. ...continue reading.
Tilman Fertitta Gets His Chain
Posted: Tue, November 08, 2011 at 9:34am (CST)
You knew it would happen: Tilman Fertitta is buying McCormick & Schmick's. And not only is the Landry's chairman and serial restaurant buyer purchasing the seafood chain, he's buying it for 50 cents a share less than the $9.25-per-share price he initially offered. McCormick announced the $131.6 million deal this morning. ...continue reading.
It's The Performance, Stupid
Posted: Fri, November 04, 2011 at 4:44pm (CDT)
An analysis of recent quarterly same-store sales reports from the vast majority of publicly traded restaurant chains has confirmed what we already know: this is a competitive restaurant market. Some restaurants are struggling. Others are surging. But those that are surging are doing especially well. ...continue reading.
Private Equity's Mixed Track Record
Posted: Thu, November 03, 2011 at 5:00pm (CDT)
The buyout boom years of 2005 to 2007 haven't been good to private equity buyers of restaurant chains. In that period, those investors, buoyed by cheap debt, bought up numerous chains around the country. Yet of the 35 restaurants they bought in those years, 11 have gone bankrupt, and two others are in distress. ...continue reading.
If You Can't Beat Them ...
Posted: Wed, November 02, 2011 at 5:14pm (CDT)
A few years ago, the local Bakers Square near the Monitor's offices erected a bright green sign calling itself "The Square & Cafe." Inside the store tested a limited-service counter alongside its full-service restaurant. It was confusing. We never saw anybody in line at the counter and the test went nowhere. But casual and family chains haven't stopped trying to figure out the fast casual trend. ...continue reading.
Cracker Barrel Goes On The Offensive
Posted: Tue, November 01, 2011 at 5:00pm (CDT)
Cracker Barrel on Tuesday filed its latest proxy presentation with the Securities and Exchange Commission, and it pulls no punches when it comes to the investor that is trying to gain a seat on the Tennessee chain's board. The presentation takes Sardar Biglari to task for everything from the way he took over Steak 'N Shake to the wording of his public documents. ...continue reading.