Restaurant Finance Across America
Archived postings from November, 2012...
Does Yum Brands Have A China Problem?
Posted: Fri, November 30, 2012 at 3:41pm (CST)
What a difference a year makes. By all accounts, 2011 was a fabulous year for Yum Brands, at least in China, where it could seemingly do no wrong. Its full-year same-store sales grew 19 percent, culminating with an extraordinary 21-percent comp growth in the fourth quarter. That’s good, even in a booming economy....continue reading.
Operators' Expectations Fall Off A Cliff
Posted: Fri, November 30, 2012 at 10:13am (CST)
Suddenly, restaurant operators don’t see things getting better. The National Restaurant Association’s monthly Restaurant Performance Index fell to its lowest level in 14 months, the trade group said today, a decline marked by a steep drop in operators’ expectations for the coming months. ...continue reading.
Ethanol's Impact On Restaurants? $3.2 Billion
Posted: Thu, November 29, 2012 at 4:38pm (CST)
Ethanol is costing restaurant operators $20,000 to $30,000 per location. That, at least, is according to a study this week by the National Council of Chain Restaurants, which this week said that federal ethanol standards could cost chain restaurants $3.2 billion in the form of higher food prices. ...continue reading.
Luby's Buys Another Burger Concept
Posted: Wed, November 28, 2012 at 4:03pm (CST)
Luby's wants a Cheeseburger in Paradise. The Houston-based company said today that it entered into an agreement to buy the 23-unit Cheeseburger in Paradise chain. The deal is valued at $11 million, and Luby's said that it plans to expand the brand beyond its current 14-state footprint. ...continue reading.
News Flash: Consumers Still Spending Money
Posted: Tue, November 27, 2012 at 1:16pm (CST)
This fall, executives at McDonald’s and Chipotle put a scare into restaurant industry observers by reporting noticeably slowing same-store sales and, in turn, blaming that slowdown on weakening consumer spending. We now know that their reasoning is wishful thinking. ...continue reading.
Strong Black Friday Good For Restaurants
Posted: Mon, November 26, 2012 at 2:37pm (CST)
Conventional wisdom has it that restaurants should struggle for the rest of the year, so far as same-store sales are concerned. But there is at least one good sign for the industry as we start the final week of November: the Christmas shopping season is off to a good start. ...continue reading.
Health Care Act Backlash Generates A Backlash
Posted: Tue, November 20, 2012 at 5:03pm (CST)
Since President Obama won re-election two weeks ago, restaurant franchisees, and a few CEOs, have generated controversy, and a few boycotts, over their complaints about the upcoming health care mandate known as Obamacare. But much of the backlash against these operators is overblown. ...continue reading.
Popeyes Starts Converting The KFCs
Posted: Mon, November 19, 2012 at 4:16pm (CST)
Popeyes isn’t wasting any time. The Atlanta-based chicken chain has already started work converting some of the 27 restaurants it acquired from a bankrupt KFC franchisee, on the very day that the company announced that the $13.8 million purchase has been finalized. ...continue reading.
Why CKE Abandoned Its IPO
Posted: Fri, November 16, 2012 at 4:54pm (CST)
Say what you will about Andrew Puzder, the CEO of CKE Restaurants, but you certainly know where he stands on things. And so his talk on the last day of the Restaurant Finance & Development Conference was fascinating, particularly when the subject came around to his company’s abandoned IPO bid. ...continue reading.
Cracker Barrel Wins Another Proxy Fight
Posted: Thu, November 15, 2012 at 11:46am (CST)
(UPDATED) Sardar Biglari’s second effort didn’t work. The San Antonio investor lost his proxy fight against Cracker Barrel this morning, when the chain’s shareholders overwhelmingly voted for the company’s slate of board nominees, opting to maintain status quo after a strong year for Cracker Barrel stock. ...continue reading.
McDonald's And The Zero-Sum Game
Posted: Thu, November 15, 2012 at 10:32am (CST)
McDonald’s this morning said that it is replacing the president of its U.S. operations, Jan Fields, with Jeff Stratton. The release read like a retirement announcement, filled with the nice things Fields did, but analysts looked at it differently, calling it an indication that the Chicago-based burger giant is acknowledging its problems. ...continue reading.
Consolidation Creating 'Mega-Franchisees'
Posted: Wed, November 14, 2012 at 2:14pm (CST)
The consolidation that's been evident in the franchise sector the past two years isn't going to end anytime soon, at least based on things we've heard at the Restaurant Finance & Development Conference this week. Why? Bigger operators may simply be better equipped to handle the challenges expected to pressure profits in coming years. ...continue reading.
Obamacare Confounds The Restaurant Industry
Posted: Tue, November 13, 2012 at 5:44pm (CST)
Will health care stifle franchise expansion? It could, at least in the short run. Single-unit restaurant companies could hold back on adding more units out of fear of facing a dramatic increase in their health insurance costs, according to Joe Koss, CFO of Wisconsin-based Culver's. ...continue reading.
What Will Biglari Do Next?
Posted: Fri, November 09, 2012 at 12:13pm (CST)
The proxy fight between Biglari Holdings and Cracker Barrel has quieted down this week, since a pair of proxy advisory firms recommended that shareholders of the Nashville family dining chain vote to re-elect the company’s board. At this point, it may be safe to wonder what Sardar Biglari will do next. ...continue reading.
Thanks To GE, Popeyes Gets Its Bankrupt KFCs
Posted: Wed, November 07, 2012 at 6:37pm (CST)
Popeyes is making a move into Minnesota and Northern California. A federal bankruptcy court judge in Minnesota approved the sale of 28 KFC units owned by Wagstaff Management to Popeyes in a deal that will enable the Atlanta-based chicken chain to push its bigger rival out of a major market. ...continue reading.
Carrols New Burger Kings Needed Some Work
Posted: Wed, November 07, 2012 at 10:20am (CST)
Much was made when Carrols Restaurant Group paid Burger King a seemingly bottom-basement price for 278 company-owned restaurants in March—a cash and equity value of about $58 million, or just over $200,000 per store. Now we know why those restaurants came so cheap: they needed a lot of work. ...continue reading.
Why Restaurants' Discounts Aren't Working
Posted: Tue, November 06, 2012 at 3:06pm (CST)
Is the discount dead? No, but there’s growing evidence that restaurants’ most common strategies to bring in the budget diner are not working. Despite a market loaded with financially strapped consumers, deal-based visits to restaurants have declined each of the past two years, according to new numbers from NPD Group. ...continue reading.
Private Equity-Backed Franchisee Buys 120 KFCs
Posted: Tue, November 06, 2012 at 11:20am (CST)
The guys behind Genghis Grill are getting into fried chicken. The Chalak Group, whose principals operate the 100-unit Dallas-based Genghis Grill chain, is backing KFC franchisee Mitra QSR's acquisition of 120 corporate units in the Northeast. Terms of the deal were not disclosed. ...continue reading.
Landry's-Del Frisco's Deal? Not Likely
Posted: Mon, November 05, 2012 at 5:05pm (CST)
Today was an odd day for Del Frisco’s. This morning, the website Benzinga, citing anonymous sources, said that the Texas-based steak chain was “very close” to being sold to its fellow Texan, Tillman Fertitta. The company’s stock shot up 5.8 percent. The problem: it doesn’t appear to be true. ...continue reading.
Advisory Firms Deal Biglari's Proxy a Huge Blow
Posted: Mon, November 05, 2012 at 12:21pm (CST)
For all of the campaigning in the proxy fight between Cracker Barrel and Biglari Holdings, many institutional investors simply don’t pay attention and wait to see what the proxy advisory firms have to say. If that’s indeed the case, then Sardar Biglari's campaign for two board seats might have been dealt a fatal blow. ...continue reading.
A New Bidder Emerges For MN-CA KFCs
Posted: Fri, November 02, 2012 at 2:00pm (CDT)
Popeyes shouldn’t count on getting those KFC restaurants just yet. Another bidder, an existing KFC franchisee with significant backing from the franchisor, has emerged with an offer pay $16 million for 34 of 49 restaurants being sold by the bankrupt KFC franchisee Wagstaff Management. ...continue reading.