February 2014

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Five Things Quiznos Can Do To Fix Itself

Denver-based sub chain Quiznos is reportedly preparing to file for federal bankruptcy protection. But what does the chain need to do to reinvigorate its brand again? Here are some things we think it should do.

Biglari Buys, You Guessed It, Maxim

We've been wondering for a while whether Sardar Biglari was about to make an acquisition. We didn't quite guess this one: Maxim, the New York-based media company with a website and magazine known for its covers of scantily-clad women.

Pizza Chains Get Business From Independents

The country's biggest pizza chains have been reporting tremendous success in recent years, prompting various observers to opine that these companies are getting customers looking for low-cost options to feed their family. But there's another reason: they're taking business away from independents.

Restaurants' Keep Expansion To A Minimum

Restaurants continued to be conservative when it comes to expansion last year, according to the latest unit count by Chicago-based market research firm NPD Group. The one exception: fast casual.

How Restaurant Companies Should React To An Activist

With more activists targeting the restaurant industry, executives and boards should be prepared in case they're next. For an example of a good response, look to Cracker Barrel. For a bad one, look to Bob Evans.

Starboard Calling For A Special Meeting

Starboard apparently isn't going to sit around and just hope that Darden agrees to its demands. The activist investor, which owns 5.5 percent of the casual dining operator's stock, this morning asked Darden shareholders to call a special meeting.

Can Fast Casual Chains Use Drive Thrus?

Fast-casual brands have generally avoided drive thrus, for various reasons. But more concepts have started exploring the idea. We asked Don Fox, the CEO of one such company, Firehouse Subs, for some insight into whether a drive thru can work for a fast-casual chain. His answer? It's not for everybody.

BJ's Steady Decline

BJ's Restaurants, the Huntington Beach, California-based casual dining chain, was once an investor darling and the great hope of the entire casual dining sector. But the company's stock has been on a steady, two-year decline, one accelerated today after its latest disappointing quarterly report.

Starboard Hires A Former Olive Garden President

Starboard Value has hired none other than Brad Blum as an advisor, as the activist investor continues to push for major changes at Darden Restaurants. Blum led Olive Garden during its heyday in the 1990s.

Will A Minimum Wage Hike Cost Jobs?

The Congressional Budget Office yesterday said that 500,000 jobs could be lost if the federal minimum wage rose to $10.10. But other evidence suggests that restaurants wouldn't be the ones cutting those jobs.

Are Panera And Potbelly Growth Chains?

A pair of chains that sell a lot of sandwiches, Potbelly Sandwich Works and Panera Bread, are both frequently considered to be growth chains. Yet neither concept can say that after their most recent quarters.

Chipotle Gets Into Show Business

Chipotle introduced a TV series on Hulu this week called Farmed and Dangerous. The program is the chain's latest, outside-the-box effort to market its values message of sustainable agriculture. But that doesn't make the program any good.

Another Store Sale For Wendy's

Wendy's said today it has sold 70 restaurants in the Dallas area to Muy Hamburger Partners, the subsidiary of big Yum Brands franchisee Muy Companies. Wendy's has now sold about three-quarters of the 415 restaurants it plans to sell.

How Refranchising Worked For Burger King

Burger King completed the rapid refranchising of its system last year, giving us the opportunity to analyze the impact such efforts have on franchise systems. That program has been a huge plus for the Miami-based chain.

Red Robin Avoids The Discount Trap

Casual dining chains have been using discounts and coupons to maintain market share in the past few years. Red Robin has taken a different approach, focusing on appetizers, drinks and higher-priced items to get its customers to spend more. It's worked.

Wendy's Is Winning The Burger Battle

Both Wendy's and Burger King enjoyed much better fourth quarters than their big rival, McDonald's. But a deeper look at sales trends over the past two years give the decided edge to the chain with the pigtails.

Fox & Hound Has A Deal With Cerberus

Few buyers apparently wanted Fox & Hound Restaurant Group. The owner of sports bar chains, which filed for bankruptcy in December, has a deal with one of its lenders, Cerberus Business Finance, worth more than $125 million.

Dave's Investors Love The New CEO

Famous Dave's announcement this week that CEO John Gilbert resigned and was replaced, perhaps temporarily, by Ed Rensi was cheered by investors. Its stock skyrocketed 15 percent, and is up again today. Why?

Cold Diners Stayed Home Last Month

The good news is that restaurant sales improved in January. The bad news is that they still stunk, as diners stayed home in drives, too scared to go outside and trudge through snow or freeze to death.

Starboard May Push Changes To Darden Board

Starboard Value said today that it will push to replace a majority of Darden's board, if the Orlando-based casual dining giant goes through with a planned spinoff of the Red Lobster brand.

Famous Dave's CEO Resigns

Famous Dave's, the Minneapolis-based barbecue chain that has spent the past year beset by several activist investors, is getting a new CEO. Ed Rensi, a former McDonald's executive, was named interim CEO this morning following the resignation of John Gilbert.

Restaurant Job Growth Hits 18-Year High

In a year in which restaurants were supposedly getting ready to cut staff and trim back hours, they in fact kept hiring. The industry's job growth hit an 18-year high last year, and more gains are projected for this year.

Why Is Private Equity Paying Up For Franchisees?

The prices being paid for large franchisees in strong brands are historically high right now, largely because of heavy involvement from private equity groups. But why would they risk their returns by paying such prices?

Bankruptcies Hitting The Restaurant Industry

Two regional restaurant chains filed for bankruptcy on back-to-back days this week, suggesting that the recession and its aftermath are still taking their toll on the industry, and its weaker concepts.

First Watch Buys A Local Chain

First Watch Restaurants has purchased the 20-unit Arizona concept The Good Egg. The aggressive deal instantly gives First Watch a strong presence in the Southwest, and boosts its overall unit count by 20 percent.