Restaurant Finance Across America
Archived postings from June, 2012...
Start Calculating Those Insurance Costs
Posted: Thu, June 28, 2012 at 3:46pm (CDT)
The Supreme Court this morning affirmed the constitutionality of most of the health care overhaul, otherwise known as Obamacare. Amid the tons of analysis in print, on blogs and on television, we at the Monitor are here to answer the question all of you really want to know: what does this mean for restaurant valuations? ...continue reading.
J. Alexander's Activists Don't Like The Merger
Posted: Thu, June 28, 2012 at 8:45am (CDT)
At least one investor doesn't like the proposal to merge J. Alexander's into Fidelity's American Blue Ribbon Holdings: the Privet Fund, the owner of 10 percent of the Nashville-based chain's shares and the activist that has been agitating for change at the 33-unit concept for months now. ...continue reading.
Gasp! Chipotle's Comps May Fall Into Single Digits
Posted: Wed, June 27, 2012 at 2:50pm (CDT)
Beware the dangers of high expectations. Stock in Chipotle Mexican Grill, which has surged into valuations multiples typically reserved for high-flying Internet companies, fell more than 5 percent today after an analyst predicted that the company's comp sales could fall into the single digits. ...continue reading.
Fidelity Buys J. Alexander's
Posted: Mon, June 25, 2012 at 8:59am (CDT)
J. Alexander's decided to get rid of its activists the easy way: selling itself. The 33-unit casual dining chain out of Nashville, which has spent the year fending off investors from the Privet Fund, said today it has agreed to sell itself to Fidelity National Financial, otherwise known as American Blue Ribbon Holdings. ...continue reading.
Franchisees Going Back To Single Brands
Posted: Fri, June 22, 2012 at 3:34pm (CDT)
This week we released the Monitor 200, our annual ranking of the nation's largest restaurant franchisees. Not surprisingly, the biggest restaurant franchisees got bigger—thanks mostly to acquisitions, they grew at a faster rate than the restaurant industry as a whole in terms of sales and unit count. But here is a surprise: they were less likely to own multiple concepts. ...continue reading.
Investors Park Their Money At Sonic
Posted: Thu, June 21, 2012 at 4:34pm (CDT)
Restaurants outperformed the broader stock market today, which is to say that investors didn't pound all of them into oblivion like they did just about everything else—the S&P 500 fell more than 2 percent today. And one of the better performers among restaurant companies was, oddly enough, Sonic. ...continue reading.
Burger King Goes Public ... Again
Posted: Wed, June 20, 2012 at 5:00pm (CDT)
Burger King started selling shares to the public this morning, making this the third time in the Miami-based chain's history that it is a public company. Investors didn't exactly eat up the shares, however—it was more like they nibbled at the shares, or perhaps stole a few bag fries. ...continue reading.
Casual Dining Has A Value Problem
Posted: Tue, June 19, 2012 at 2:10pm (CDT)
Yesterday, we noted that quick-service restaurants are leaving casual dining chains behind as they set themselves up to grow for the next few years. Today we got some evidence as to why: fast food restaurants have caught up with their casual-dining cousins in terms of customer satisfaction. ...continue reading.
News Flash: QSRs Leave Casual Dining Behind
Posted: Mon, June 18, 2012 at 10:36am (CDT)
Remember the Great Recession when plenty of us were wondering whether consumers had permanently changed their spending habits? Apparently, they haven't, and that's good news for restaurants. According to the New York-based lender Rabobank, consumers will spend more eating out than they do eating at home by 2018. But not all will enjoy growth. ...continue reading.
Is Startup Lending On The Rebound?
Posted: Fri, June 15, 2012 at 9:50am (CDT)
The lending market has gradually, if slowly, improved since the credit crisis in 2008, with some borrowers, notably large ones, benefiting the most. There's been one exception: startups. Someone starting a new franchise location has had about as much luck getting a loan as they'd have winning the lottery. But there is some evidence that is starting to change. ...continue reading.
Could KFC Follow Burger King On The Comeback Trail?
Posted: Thu, June 14, 2012 at 1:56pm (CDT)
By most accounts, KFC is a system in decline. Its system sales in the U.S. fell 4.3 percent last year, according to a Technomic estimate. Its unit count fell by 5.2 percent. Some of its biggest franchisees have gone bankrupt or are being sued by the franchisor. And yet the system may well be undervalued. ...continue reading.
Yum Gets Punished For McDonald's Problem
Posted: Tue, June 12, 2012 at 11:47am (CDT)
Fridays haven't been good to Yum! Brands lately. On June 1, when the stock market was plunging, the Kentucky-based company's stock fell 8 percent. Last Friday, it fell 3.3 percent on high volume, even though the company didn't do a thing. But another company did do something that day, McDonald's. ...continue reading.
Granite City Gets Another Investment
Posted: Mon, June 11, 2012 at 10:55am (CDT)
Granite City Food & Brewery is getting another cash infusion from its majority owners. The struggling casual dining chain out of Minneapolis said this morning that it has agreed to sell Concept Development Partners 3.125 million shares for an investment of $6.5 million. ...continue reading.
Another Tough Month For McDonald's
Posted: Fri, June 08, 2012 at 10:11am (CDT)
All winning streaks come to an end, and we starting to wonder whether that's happening with McDonald's. The Illinois-based QSR behemoth this morning reported weak sales in May that disappointed in all regions of the globe, thanks to competition in the U.S. and general weakness in Europe and Asia. ...continue reading.
The Beall Tolls For Ruby Tuesday
Posted: Thu, June 07, 2012 at 12:58pm (CDT)
It's pretty telling when, the day after a company's longtime CEO resigns, that investors have almost no reaction. That's what's happening this morning with Ruby Tuesday, which is up less than 1.5 percent today, the first day of training following the resignation of longtime CEO Sandy Beall. ...continue reading.
Yup, The Winter Gave Restaurants A Boost
Posted: Wed, June 06, 2012 at 9:27am (CDT)
As if the lengthy string of strong restaurant sales and traffic numbers from the first quarter wasn't evidence enough, the NPD Group has now confirmed that this winter was a good one for eateries. The Chicago-based consumer information firm said that consumers increased their visits to restaurants by the largest amount in four years—but not all restaurants were beneficiaries. ...continue reading.
Catterton Partners Buys A Sandwich Chain
Posted: Tue, June 05, 2012 at 3:56pm (CDT)
This is a good time to be an upstart restaurant concept. Catterton Partners, the consumer-focused private equity group that has had its hands in its share of growing chains in recent years, has made an investment in a five-unit sandwich chain out of Los Angeles called Mendocino Farms. ...continue reading.
Did Facebook Ruin The IPO Market?
Posted: Tue, June 05, 2012 at 12:17pm (CDT)
Poor Dave & Buster's. The Dallas-based food and games chain tried going public in 2008, just before the bottom fell out of the economy and the IPO market. It's trying again, and now the IPO market may be frozen again—thanks to Europe and, apparently, Facebook. ...continue reading.
Starbucks Taking Aim At Panera?
Posted: Mon, June 04, 2012 at 4:02pm (CDT)
As chains like McDonald's and Dunkin' Donuts have made various moves into the coffee business over the years, Starbucks has gone in the opposite direction, expanding its food options to look more like a bakery/cafe concept. Now it's taking an even bigger step in that direction with the $100 million acquisition of a San Francisco bakery company. ...continue reading.
P.F. Chang's Gives Casual Diners A Boost
Posted: Mon, June 04, 2012 at 2:32pm (CDT)
This has been a tough few weeks for the stock market. Since May 1, the S&P 500 is down 9.1 percent. And several restaurant chains are down right along with it, including heretofore stock market stalwarts McDonald's, Yum! Brands, Panera Bread and Chipotle. Yet casual dining chains have been surprisingly resilient. And it may all be thanks to P.F. Chang's. ...continue reading.
Carrols Starts Focusing On Burger King
Posted: Fri, June 01, 2012 at 11:05am (CDT)
Carrols Restaurant Group spent years spending money to build the brands that now make up the Fiesta Restaurant Group, It hardly had time to focus on Burger King. Now that Fiesta is a separate company, Carrols is focused solely on its Burger King stores—and its purchase of 278 units from the Miami-based franchise was just a start. ...continue reading.