Restaurant Finance Across America
Archived postings from December, 2011...
Five Reasons Quiznos Is Nearly Bankrupt
Posted: Fri, December 30, 2011 at 11:05am (CST)
We got wind of Quiznos' debt restructuring announcement while navigating holiday traffic in rural Wisconsin and didn't get a chance to write about it right away, but we have read some of the stories about the restructuring. Most of them blame the company's problems on Subway's $5 footlongs. A few more knowledgable observers blame the problem on its cost structure. Neither explanation gets it totally right. ...continue reading.
Franchisees Buy A&W
Posted: Fri, December 23, 2011 at 10:48am (CST)
Yum! Brands finally closed on its sale of A&W Restaurants. The Kentucky-based franchisor this morning announced the sale of the chain to a coalition of U.S. and international franchisees that call themselves A Great American Brand, LLC. That coalition lured back Kevin Bazner, who served as A&W's president from 1999 to 2003, to be its chief executive. ...continue reading.
Catterton Unloads First Watch
Posted: Fri, December 23, 2011 at 8:58am (CST)
'Twas the night before Christmas, and all through the house, not a creature was stirring ... except a bunch of private equity groups trying to close deals for restaurants before the holiday. In one such deal, the Florida-based family dining chain First Watch changed hands, with the private equity group Freeman Spogli & Co. buying the chain from Catterton Partners. ...continue reading.
Denny's Wants To Get Bigger
Posted: Thu, December 22, 2011 at 4:59pm (CST)
Denny's apparently means business when it says it wants to expand. Fresh off an effort to convert 140 restaurants in Flying J Travel Centers, the venerable South Carolina chain is taking aim at its weakest markets, and is using some significant incentives to get franchisees to open new units. ...continue reading.
Can Quiznos Return To Prominence?
Posted: Thu, December 22, 2011 at 10:30am (CST)
Quiznos is expected to announce its debt restructuring deal this week, which should pave the way for a much-needed marketing blitz early next year. Yet the deal, as reported, still leaves us with one, big question: Did the Denver-based sub chain shave off enough debt? ...continue reading.
Some Montana KFCs Get Sold
Posted: Thu, December 22, 2011 at 9:59am (CST)
How much do you think a company that owns nine KFC restaurants which pay no royalty, thanks to a franchise agreement signed by none other than Harlan Sanders, and which also owns the rights to franchise an entire state? KFC, apparently, thought the answer was just $518,000. Suffice it to say, it didn't get to buy the bankrupt restaurants—but it did try stopping the person who did. ...continue reading.
Nobody Wanted To Buy Friendly's
Posted: Wed, December 21, 2011 at 5:07pm (CST)
Apparently, it's getting tougher to sell a bankrupt restaurant chain. Friendly's Ice Cream, the Massachusetts-based family dining chain, was set to go to auction tomorrow, but a lack of bidders led the company to cancel its auction—effectively keeping ownership of the chain with Sun Capital. ...continue reading.
Resolution Coming On Quiznos?
Posted: Wed, December 21, 2011 at 4:32pm (CST)
Quiznos, which has been moving towards a resolution on its debt issues with all the speed of a turtle caught in molasses, apparently may soon reach a deal on a debt-for-equity swap or file for bankruptcy, according to a report earlier today in the Wall Street Journal. ...continue reading.
Cracker Barrel Wins Its Proxy Fight
Posted: Tue, December 20, 2011 at 10:53am (CST)
Cracker Barrel shareholders today backed management in its fight against the activist investor Sardar Biglari, handing a defeat to the chairman of Biglari Holdings and the Tennessee chain's largest shareholder, while giving company executives an important vote of confidence in its turnaround plan. ...continue reading.
Cracker Barrel Proxy: A Referendum On Management, Or Biglari?
Posted: Mon, December 19, 2011 at 4:20pm (CST)
Cracker Barrel management will find out tomorrow whether they'll have a good Christmas, or whether Santa will leave coal in their stockings in the form of an activist investor winning a seat on the board of directors. Because make no mistake, if Sardar Biglari wins the proxy vote tomorrow, there will almost certainly be a major executive shakeup at the Tennessee-based chain. ...continue reading.
Fertitta Buys Another Restaurant: Morton's
Posted: Fri, December 16, 2011 at 8:52am (CST)
It's just a matter of time before Tilman Fertitta owns every restaurant in the country. The Houston-based serial acquirer of eateries got his hands on another chain, this time the Chicago-based Morton's Restaurant Group, owner of Morton's The Steakhouse. And just like everything else, he got the deal cheap, at $6.90 a share. ...continue reading.
Proxy Advisory Firms Split On Biglari
Posted: Thu, December 15, 2011 at 9:55am (CST)
There are two big proxy advisory firms that analyze proxy votes held by publicly traded companies for big institutional investors like mutual funds and pension funds. And apparently, they don't always agree. Such has been the case in the current proxy fight between Cracker Barrel and the activist investor Sardar Biglari. ...continue reading.
One Key To Financing? Choose Better Franchisees
Posted: Wed, December 14, 2011 at 3:17pm (CST)
The small business and franchise lending market remains tight. Lenders are pickier when they make their loans, and their criteria remains tougher than it was a few years ago. So what's a franchise to do to improve its franchisees' chances with the banker? Pick different franchisees. ...continue reading.
Cosi Gets A New CEO
Posted: Mon, December 12, 2011 at 4:10pm (CST)
Cosi got a new CEO, and it's not Brad Blum. Carin Stutz, president of Global Business Development for Brinker International, has agreed to take on the task of turning around the Illinois-based fast-casual concept. Her first task: keeping Cosi from losing its Nasdaq listing. ...continue reading.
Sardar Biglari And The Lugubrious Cracker Barrel
Posted: Fri, December 09, 2011 at 3:37pm (CST)
Sardar Biglari sent Cracker Barrel shareholders a five-page letter, with seven pages of appendices, once again making his case for membership on the board of the Tennessee-based family dining chain. But he leaves out one small fact: A proxy ratings agency is recommending against his election. ...continue reading.
2012 Outlook Looks Just Like 2011
Posted: Fri, December 09, 2011 at 11:45am (CST)
There's an old saying that if you simply said tomorrow's weather would be just like today's weather, you'd be just as likely to get the prediction right as your local weatherman. That apparently appears to be the strategy behind Fitch Ratings' annual U.S. restaurant industry outlook. ...continue reading.
Buying A Company? Check Facebook
Posted: Thu, December 08, 2011 at 12:08pm (CST)
Private equity groups do their due diligence when they look to purchase a restaurant chain, or any other company, for that matter. They look at their financials. They analyze market numbers. They talk to company managers and they study the products. And these days they check Facebook. ...continue reading.
News Flash: Americans Still Love Pizza
Posted: Wed, December 07, 2011 at 4:27pm (CST)
I was caring for my two boys last night and was pressed for time, and after going through the various restaurant options I decided to get a couple of pizzas. The cost was less than $15 and I fed the entire family and still had some leftovers. A trip to Subway over the weekend cost us twice that. And thus we have perhaps the biggest reason pizza chains have recovered nicely despite the recession's slow growth. ...continue reading.
Olive Garden Gives Darden A Headache
Posted: Tue, December 06, 2011 at 10:46am (CST)
Companies that own multiple restaurant brands tend to play a never-ending game of Whack-A-Mole: just when you fix one concept, another one with problems pops up. Such is life with casual-dining giant Darden Restaurants, which just fixed Red Lobster only to find that Olive Garden is a problem now. ...continue reading.
Consumers Love Their Drinks
Posted: Mon, December 05, 2011 at 5:05pm (CST)
This is a pretty good time to be in the drink selling business—hot drinks, in particular. Publicly traded drink and snack concepts like Dunkin' Donuts, Starbucks and Teavana saw their comp sales increase 5 percent on average in the most recent quarter—proving, apparently, that we can't get enough $2 coffee. ...continue reading.
Cracker Barrel CEO Questions Steak N Shake Performance
Posted: Fri, December 02, 2011 at 3:17pm (CST)
The latest in the almost-daily saga that is the Cracker Barrel proxy fight comes from the Tennessee-based family chain, which today released a letter from CEO Sandra Cochrane, who questions the performance of the activist investor Sardar Biglari's Steak N Shake chain. ...continue reading.
Wingstop Looks To Speed Development
Posted: Fri, December 02, 2011 at 11:14am (CST)
Wingstop wants to grow, and it wants to grow now. So the Texas-based chicken wing concept this week announced a new, $15 million lending program with Franchise America Finance and The Bancorp Bank that should enable franchisees to get loans approved faster to speed development. ...continue reading.
A Treat Chain Buys A Smoothie Concept
Posted: Thu, December 01, 2011 at 3:43pm (CST)
If Tasti D-Lite's long-term goal is to become a healthier version of Dairy Queen, it's on the right track. On Wednesday, the Tennessee-based seller of ice cream-like desserts bought the southeast regional smoothie chain Planet Smoothie, making it a modern-day version of Dairy Queen's 1987 purchase of Orange Julius. ...continue reading.
Wendy's Erases Its Arby's History
Posted: Thu, December 01, 2011 at 11:59am (CST)
Wendy's has been gradually erasing all memories of its brief marriage with Arby's since selling the roast beef brand this summer. First, it moved its official headquarters back to Dublin, Ohio from Atlanta, where it was moved after their 2008 merger. And today, the company announced it was moving the rest of its corporate offices back to Wendy's original hometown. ...continue reading.
How Well Has Cracker Barrel Performed?
Posted: Thu, December 01, 2011 at 10:39am (CST)
In his most recent letter to Cracker Barrel shareholders, the activist investor Sardar Biglari compared the stock performance of Cracker Barrel with the S&P 500 Restaurant Index. Not surprisingly, the comparison was unfavorable. Over five years, the S&P restaurants' returns were 103.4 percent. Cracker Barrel's: 10.6 percent. ...continue reading.