Restaurant Finance Across America
Archived postings from October, 2012...
Competition Still Driving Bank Lending
Posted: Wed, October 31, 2012 at 2:57pm (CDT)
Forget any idea of an improving industry outlook or a better economy. The biggest thing driving bank lending practices is … other banks. That is the conclusion from the latest Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices, which found a lending environment that is still improving. ...continue reading.
Some Scary Signs For Restaurants
Posted: Wed, October 31, 2012 at 1:35pm (CDT)
The restaurant industry is in a weak state. Comp sales reports from restaurant companies have been mixed, with a number of signs that the dining consumer is holding something back. And more operators told the National Restaurant Association that their traffic fell last month. ...continue reading.
Has Biglari Been Good For Cracker Barrel Stock?
Posted: Tue, October 30, 2012 at 3:31pm (CDT)
In May 2011, Sardar Biglari suddenly took an interest in a sleepy family dining chain out of Nashville. The San Antonio investor has since then amassed 17.6 percent of Cracker Barrel stock, and is trying to get on the board for the second straight year. The result has been good for the chain’s share price. ...continue reading.
How Will Sandy Affect Restaurants?
Posted: Mon, October 29, 2012 at 11:39am (CDT)
Apparently, two straight mild winters is a bit too much to ask for. Hurricane Sandy is bearing down on the Northeast, where it will collide with another storm to create a giant “Frankenstorm” that wreaks havoc on much of the country, taking the restaurant industry with it. ...continue reading.
Wings And Burgers In Short Supply
Posted: Thu, October 25, 2012 at 3:46pm (CDT)
Wings and burgers might be tougher to find in 2013. Amid rising feed costs, thanks to the summer drought, chicken wings and ground beef are in such short supply that many restaurant companies are having a tough time hedging their contracts—a key cost-containment strategy. ...continue reading.
Biglari Makes Some Promises
Posted: Thu, October 25, 2012 at 11:41am (CDT)
Sardar Biglari is promising Cracker Barrel shareholders $258 million. In a letter to shareholders today, the chairman of Biglari Holdings, who is seeking two seats on the Cracker Barrel board, laid out a plan to stop investing in new restaurants, return money to shareholders and generate additional income. ...continue reading.
Buffalo Wild Wings Losing The Election
Posted: Wed, October 24, 2012 at 9:39am (CDT)
Buffalo Wild Wings yesterday reported that its same-store sales in October have risen 3.8 percent, which is slower than usual, but not bad, until you consider this: it raised prices 6 percent, meaning that fewer people are actually dining out at its restaurants. And one of the reasons for the traffic drop is the election. ...continue reading.
Burger King Gets A New Franchisee
Posted: Tue, October 23, 2012 at 1:45pm (CDT)
Tom Garrett is getting back into the restaurant game—as a franchisee. The former president and CEO of Arby's Restaurant Group has agreed to buy 42 Burger King units in the Atlanta market from the company, becoming the latest operator to benefit from the Miami chain's mass refranchising. ...continue reading.
Steak N Shake's Label Becomes A Proxy Issue
Posted: Mon, October 22, 2012 at 1:32pm (CDT)
Steak N Shake is an oddity in the restaurant world. It doesn't fit any category nicely. It's traditionally had wait staff, and a dine-in menu similar to family dining. But it has a drive-thru, and a counter service option and a burger-and-shake focused menu that screams QSR. Now that label has become an issue in the proxy fight at Cracker Barrel. ...continue reading.
Are McDonald's Remodels Losing Their Effectiveness?
Posted: Fri, October 19, 2012 at 2:26pm (CDT)
Much has been made, on these pages and others, on the brilliance of McDonald’s remodeling program and its impact on the company’s sales. But there may be a real question now as to whether that program is as effective as it had been a few years ago. ...continue reading.
Chipotle's Growth Shifts Down
Posted: Thu, October 18, 2012 at 4:53pm (CDT)
Chipotle is slowing down, and that’s bad for people who own its stock. The Denver-based burrito chain released a third-quarter earnings report today that clearly shows that its same-store sales, traffic and revenue growth are shifting into a lower gear from its high-flying post-recessionary growth. ...continue reading.
Back Yard Burgers Goes Bankrupt
Posted: Thu, October 18, 2012 at 2:09pm (CDT)
Better burger chains might want to heed some of the problems at Memphis-based Back Yard Burgers. The 90-unit concept reached a restructuring deal with its lender, closed 19 locations and filed for federal bankruptcy protection yesterday to get out from under costly leases. ...continue reading.
Top Applebee's Franchisee Acquires 99 More Units
Posted: Wed, October 17, 2012 at 3:33pm (CDT)
Apple American Group just got a lot bigger. The San Francisco company, already the largest franchisee in the Applebee's system and the second largest franchisee of any kind, recently acquired 99 more units from Applebee's second largest franchisee, AmRest, for $94.8 million. ...continue reading.
Popeyes Trying To Take Out A KFC Market
Posted: Wed, October 17, 2012 at 10:32am (CDT)
Here's one way to stick it to your competition: buy out a bunch of their bankrupt restaurants and take out a big market. That's exactly what Popeyes Louisiana Kitchen is trying to do to its rival KFC. The Atlanta-based chain has an agreement to buy 28 locations, which it plans to convert, from the bankrupt KFC franchisee Wagstaff Management. ...continue reading.
Einstein Throws Investors A Curve Ball
Posted: Tue, October 16, 2012 at 2:58pm (CDT)
When Einstein Noah Restaurant Group said in May that it was reviewing "strategic alternatives," including a possible sale, investors had every reason to believe an actual sale would commence. Prices for chains have been on the upswing, and such reviews almost always lead to a sale. But maybe not this time. ...continue reading.
Could QSRs Gain The Upper Hand On Fast Casual?
Posted: Tue, October 16, 2012 at 1:19pm (CDT)
One of the biggest trends in the restaurant industry over the past decade has been the emergence of the alleged "fast casual" concept, a restaurant that offers casual dining food in a limited-service format. Such chains have been grabbing market share for years now, but it seems that their lower-end cousins could be getting the upper hand. ...continue reading.
Red Lobster Tries Eliminating The Veto Vote
Posted: Mon, October 15, 2012 at 2:38pm (CDT)
Red Lobster announced a new menu overhaul this morning that, among other things, introduces a bunch of non-seafood items in an effort to eliminate the so-called veto vote, under the theory that large numbers of customers avoid the chain because it serves too much seafood. But how serious is that veto vote, really? ...continue reading.
Sardar Biglari's October Surprise
Posted: Thu, October 11, 2012 at 4:46pm (CDT)
Sardar Biglari apparently isn't satisfied with the explanation Cracker Barrel gave on Tuesday for a "misunderstanding" in its proxy materials about the experience of its incoming chairman, James Bradford. The activist investor responded with a lengthy diatribe that evening, and now is apparently gearing up to do his own investigation. ...continue reading.
Can Wendy's Remodels Boost Sales 25%?
Posted: Thu, October 11, 2012 at 10:44am (CDT)
Restaurant remodel programs are all the rage these days, particularly in a fast food business that is busy trying to play keep-up with McDonald's. Just about every major fast food chain is in the midst of a reimage program, but perhaps the most interesting of these is coming from Columbus, Ohio-based Wendy's. ...continue reading.
Restaurant Sales May Be Better Than Expected
Posted: Wed, October 10, 2012 at 4:36pm (CDT)
It's amazing what a company can do with smarter advertising. Earlier this year, Maryville, Tennessee-based Ruby Tuesday decided to reduce spending on coupons, and instead it increased spending on television advertising. The result: same-store sales in its most recent quarter increased 1.9 percent. ...continue reading.
Cracker Barrel Responds To Biglari
Posted: Tue, October 09, 2012 at 1:02pm (CDT)
Cracker Barrel today blamed questions on the background of its incoming chairman, James Bradford, to a poor choice of wording in its proxy statement, and fired back at the activist investor Sardar Biglari, complaining about his "contentious rhetoric" in his effort to get two seats to the Lebanon, Tennessee restaurant chain. ...continue reading.
Biglari Questions Incoming Cracker Barrel Chairman's Background
Posted: Mon, October 08, 2012 at 10:00am (CDT)
Did Cracker Barrel's incoming chairman mislead the company about his experience? Sardar Biglari thinks so. In a letter to the company's shareholders this morning, the Biglari Holdings chairman says that claims by Cracker Barrel that James Bradford led a company traded on the New York Stock Exchange are not true. ...continue reading.
Will Taco Bell Take Away Chipotle's Customers?
Posted: Fri, October 05, 2012 at 2:53pm (CDT)
At the Restaurant Finance & Development Conference two years ago, Chipotle CFO Jack Hartung somewhat infamously stated that “I sleep quite well” when someone asked what keeps him up at night. We now wonder whether he’s having nightmares of David Einhorn eating a Doritos Locos Taco. ...continue reading.
Applebee's Long Refranchising Comes To A Close
Posted: Fri, October 05, 2012 at 1:40pm (CDT)
Applebee's is done refranchising. The casual dining chain, owned by Glendale, California-based DineEquity, said this week that it has closed on the final transaction in its five-year program to shed nearly 500 units and use the proceeds to pay off debt the company took on when it was acquired by family dining chain IHOP. ...continue reading.
Another IPO Gets Scrapped
Posted: Thu, October 04, 2012 at 5:14pm (CDT)
For the second time this year, a major restaurant company has scrapped a planned IPO. Dave & Buster's, the Texas-based food and games chain, said this afternoon that it has decided against its planned initial public offering "at this time," citing "market conditions." ...continue reading.
Cracker Barrel Makes Its Case
Posted: Thu, October 04, 2012 at 3:11pm (CDT)
This morning, Cracker Barrel sent a letter to its shareholders outlining exactly why the company doesn't think that Sardar Biglari should get his two seats on the company's board—continuing its aggressive defense largely out of fear of what Biglari may do once he gets those seats. ...continue reading.
The Blurring Line Between C-Stores And Restaurants
Posted: Wed, October 03, 2012 at 1:18pm (CDT)
At this week's MUFSO Supershow, Stan Sheetz admitted, somewhat colorfully, that he was surprised when Nation's Restaurant News called to tell him that he and his Pennsylvania-based convenience store chain, Sheetz, was to win one of the publication's "Golden Chain" awards. Yet the award was more than appropriate. ...continue reading.