Restaurant Finance Across America
Archived postings from May, 2012...
Big Chains Just Keep Getting Bigger
Posted: Thu, May 31, 2012 at 2:17pm (CDT)
According to Technomic, the U.S. limited-service sandwich sector grew by 800 units last year. Subway, the market leader, grew by 872 units. Simple math tells you this: the already-dominant sandwich chain became even more dominant last year. But Subway is hardly the only big restaurant chain increasing its market share. ...continue reading.
Cracker Barrel Makes Some Board Changes
Posted: Thu, May 31, 2012 at 8:56am (CDT)
If Sardar Biglari's goal was to have Cracker Barrel simply replace certain board members, he's now halfway toward that goal. This morning, the Tennessee-based highwayside family chain named two new directors to its board, while announcing that two of Biglari's four board targets will be retiring this year. ...continue reading.
A Big Franchisee Explains Burger King's Improvement
Posted: Wed, May 30, 2012 at 3:09pm (CDT)
Much has been made of Burger King's sudden relevance in the restaurant industry. It's figuring out a way to remodel restaurants. It lured a big investor, Bill Ackman, who is in turn helping the company go public without an expensive IPO. And sales are improving. So we turned to a big franchisee to explain it all. ...continue reading.
Fogo de Chão Gets Sold Again
Posted: Tue, May 29, 2012 at 9:23am (CDT)
It's safe to say that Fogo de Chão has been a pretty good deal for GP Investments. This morning, GP Investments sold Fogo, the Brazilian steakhouse chain based in Dallas, for $400 million, or 3.4 times GP's initial investment in the 25-unit concept six years ago. ...continue reading.
The JOBS Act Could Lead To More IPOs, To A Point
Posted: Thu, May 24, 2012 at 4:45pm (CDT)
When Bravo Brio Restaurant Group went public in late 2010 it ended a four-year drought of restaurant IPOs. Now we have no fewer than five restaurant chains seeking to follow Ignite Restaurant Group's IPO last week. Now, the JOBS Act could lead even more restaurant chains to file for an IPO. ...continue reading.
Popeyes Keeps Selling Bone-In Chicken
Posted: Thu, May 24, 2012 at 9:59am (CDT)
A year and a half ago, we attended a consumer conference in New York where AFC Enterprises was among the presenters. During the conference, I got the chance to ask Cheryl Bachelder, CEO of the Atlanta-based operator of the Popeyes chain, what she thought about the weak market for bone-in chicken. She looked at me like I had three heads. ...continue reading.
Report Says Cheddar's Is Going Public
Posted: Tue, May 22, 2012 at 11:34am (CDT)
We're in the midst of a run of restaurant company IPOs. The latest: Texas-based Cheddar's. According to Reuters, the casual dining chain has filed confidentially for an initial public offering that could raise as much as $100 million, joining a string of other restaurants jockeying for the public markets. ...continue reading.
Benihana Finds A Buyer
Posted: Tue, May 22, 2012 at 9:03am (CDT)
Following one failed sale, a string of lawsuits, proxy fights and shareholder votes, management at Florida-based Benihana finally got what it wanted: a sale of the company. The venerable Japanese steakhouse chain this morning announced that it's being sold to Angelo Gordon for $296 million. ...continue reading.
Chipotle's Labor Problems Aren't Going Away
Posted: Mon, May 21, 2012 at 11:16am (CDT)
Chipotle Mexican Grill has done little wrong since it was spun off by McDonald's and went public in 2006. Its restaurants are constantly full, making for envious unit volumes and restaurant level margins above 26 percent. The one exception has been its ongoing immigration issue, which it simply can't shake. ...continue reading.
CKE Decides To Go Public Again
Posted: Fri, May 18, 2012 at 9:19am (CDT)
The improving restaurant economy is apparently enabling private equity firms to make quicker exits. Just more than two years after going private in a sale to Apollo Management, CKE Restaurants, the owner of Carl's Jr. and Hardee's, has decided to file for an IPO so it can raise $100 million. ...continue reading.
Pat & Oscars Disappears
Posted: Thu, May 17, 2012 at 1:44pm (CDT)
It's tough to kill a restaurant chain. It's even tougher to kill a restaurant chain that franchises. But it's not impossible. To wit: Franchisees of Pat & Oscar's, the San Diego-based fast-casual chicken and rib chain that filed for Chapter 7 last year, have decided to change the concept's name. ...continue reading.
Upscale Restaurants Come Back, But Not All The Way
Posted: Wed, May 16, 2012 at 9:24am (CDT)
Are you an association or a vendor looking for some easy publicity on the Internet? Develop an index that measures something. The latest in the restaurant industry comes from Open Table, the San Francisco-based company that takes restaurant reservations over the Internet. Our conclusion from its shiny new index: upscale restaurants haven't recovered from the recession. ...continue reading.
Biglari Using 'Rope-A-Dope' On Cracker Barrel
Posted: Tue, May 15, 2012 at 4:27pm (CDT)
For some reason, we weren't invited to the Biglari Holdings annual meeting a month ago, but others did attend, and they took copious notes. According to Seeking Alpha contributor Charles Hwang, Sardar Biglari and his cohort, Phil Cooley, didn't really say anything surprising, but Hwang's notes do provide some additional insight into their views on Cracker Barrel and other issues. ...continue reading.
Dean Vlahos Files For Bankruptcy
Posted: Mon, May 14, 2012 at 4:31pm (CDT)
It's been a long downfall for Dean Vlahos. The Midwestern restaurateur, the brainchild behind Champps Americana and the Redstone American Grill chains, lost millions of dollars to a Ponzi schemer, and earlier this month filed for federal bankruptcy protection. He claimed $11.8 million in liabilities and just $45,812 in assets. ...continue reading.
Ignite Has A Nice IPO
Posted: Fri, May 11, 2012 at 4:04pm (CDT)
Maybe investors like seafood. Ignite Restaurant Group, the parent company of 122-unit Joe's Crab Shack, went public today and saw its stock surge a healthy 22.6 percent on its first day of trading, continuing Wall Street's habit of warmly welcoming restaurant companies. ...continue reading.
Quiznos Returns To The Airwaves
Posted: Fri, May 11, 2012 at 3:24pm (CDT)
This month, Denver-based sandwich chain Quiznos returned to the airwaves following a two-year absence with its first ads under new owners Avenue Capital Partners. I'm not advertising expert, but I can say that the ads, based on its new "Qrave Quiznos" marketing campaign, are an upgrade over its more recent efforts. ...continue reading.
Ignite Prices Its Stock At $14
Posted: Thu, May 10, 2012 at 5:16pm (CDT)
Those of you eagerly anticipating the ability to buy stock in Joe's Crab Shack shall soon get your wish. The chain's parent company, Ignite Restaurant Group, priced its offering today at $14 a share. The company offered nearly 5.6 million shares of stock, raising nearly $78 million. ...continue reading.
Stiller Unloads His Krispy Kreme Shares
Posted: Thu, May 10, 2012 at 10:10am (CDT)
This hasn't been a good year for Bob Stiller. Last fall, hedge fund manager David Einhorn wrote a now-famous presentation taking apart the business plan of Stiller's company, Green Mountain Coffee Roasters. Green Mountain's stock price has been in freefall ever since. And now it appears Stiller's been forced to sell much of his stock, including his huge stake in Krispy Kreme. ...continue reading.
On Biglari, Buffett And Cheap Takeovers
Posted: Wed, May 09, 2012 at 4:36pm (CDT)
Sardar Biglari, the San Antonio activist investor now trying to gain control of Cracker Barrel, was sighted at the recent annual meeting of Berkshire Hathaway, standing in the managers section along with his co-conspirator, the Trinity University business professor Phil Cooley, after the other managers had gone to lunch. ...continue reading.
Burger King Takes Sales From McDonald's
Posted: Wed, May 09, 2012 at 11:36am (CDT)
Burger King recently reported that its first-quarter same-store sales grew 4.6 percent. And the Miami-based burger chain said that those numbers have accelerated in the second quarter. Meanwhile, its longtime nemesis, McDonald's, just reported a significant slowdown in U.S. comps sales, to 3.3 percent in April. Coincidence? ...continue reading.
Bagel Sale: Einstein Noah 'Reviewing Strategic Alternatives'
Posted: Thu, May 03, 2012 at 4:39pm (CDT)
Anybody out there who has wanted to own a bagel concept, or four, may now have their chance: Lakewood, Colorado-based Einstein Noah Restaurant Group said this afternoon that it is "reviewing strategic alternatives," including a possible "business combination or a sale." ...continue reading.
The Credit Markets Make A Comeback
Posted: Wed, May 02, 2012 at 3:37pm (CDT)
The next time someone tells you that credit is unavailable in the restaurant industry, tell them the story of The Briad Group. Three years ago the New Jersey-based company, T.G.I. Friday's largest franchisee, was perilously close to bankruptcy. This week it closed on a $195 million credit facility involving a legion of bankers and a low rate. ...continue reading.
Ignite Tones Down Its Offering
Posted: Tue, May 01, 2012 at 4:47pm (CDT)
Ignite Restaurant Group is apparently lowering its expectations for its upcoming IPO. The operator of the 122-unit Joe's Crab Shack chain set the terms for its initial public offering this week, and apparently is planning to raise $75 million—lower than the $100 million it initially said it wanted. ...continue reading.
Hooters Lawsuit Dismissed; Both Sides Declare Victory
Posted: Tue, May 01, 2012 at 2:01pm (CDT)
We interrupt this restaurant business blog to bring you this piece of vital news from the world of Hooters: The Atlanta-based breastaurant chain this week settled its lawsuit against La Cima, the franchisee of upstart rival chain Twin Peaks started by Hooters' former CEO, Coby Brooks. Yet based on twin releases this week, the dispute is anything but "settled." ...continue reading.
Applebee's Unloads More Restaurants
Posted: Tue, May 01, 2012 at 10:29am (CDT)
Timothy George must have liked what he saw when he advised IHOP on its purchase of Applebee's back in 2007. California-based DineEquity this morning said it has sold 39 more Applebee's units in Virginia to Potomac Family Dining Group, the company George formed in 2010 to buy 30 Applebee's restaurants in the Washington DC area. ...continue reading.
P.F. Chang's To Escape The Public Limelight
Posted: Tue, May 01, 2012 at 9:23am (CDT)
Well, that's one way to get your stock price up. P.F. Chang's, the Arizona-based operator of Asian concepts, said this morning that it has agreed to a sale to the New York private equity firm Centerbridge Partners for $1.1 billion—or $51.50 a share, which is 30 percent above the company's closing stock price on Monday. ...continue reading.