March 2014

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Another Restaurant Bankruptcy: Carino's

Restaurant chains are dropping like flies right now. Johnny Carino's, the 130-unit Italian chain, filed for bankruptcy late last week, making it the sixth restaurant chain to do so in recent weeks.

El Pollo Loco Highlights Booming IPO Market

According to the Wall Street Journal, the chicken chain El Pollo Loco is planning an initial public offering, making it only the latest in a series of restaurants that are planning to go public. It's also the best indication yet that the IPO market is frothy.

Want To Grow Your Franchise? Focus On Profits

Lenders at the Franchise Times Franchise Finance & Growth Conference on Thursday said that one of the main things they look for in a brand is a focus on profitability. And some of the best performing brands at the moment have demonstrated why that focus works.

New Products Have Been Really Good For Arby's

Since its 2011 split from Wendy's, Arby's has come out with a succession of new sandwiches that have helped drive same-store sales at the once-struggling brand. At the same time, the chain has eliminated some menu items to keep its brand from getting too complex.

How Long Can Otis Last?

Pressure from activist investors is now aimed directly at Darden Chairman Clarence Otis. The activist Barington Capital this morning sent a letter to Darden's independent directors, saying it has lost confidence Otis's leadership.

Sentinel Capital Buys Newk's Eatery

Sentinel Capital has bought the Jackson, Mississippi-based Newk's Eatery. Terms of the deal were not disclosed, but it continues a flurry of acquisitions and sales of businesses by Sentinel in recent months.

Red-Hot Wendy's Completes Refranchising

Wendy's said on Monday that it has sold four company-owned markets to three groups of experienced franchisees, finishing the 418-unit refranchising effort earlier than expected.

Darden Buys High And Sells Low

Darden Restaurants has a history of buying restaurants at high prices, and selling them at low prices, at least according to the activist investor Starboard Value, which noted that the 2012 Yard House acquisition might have been purchased at a multiple even higher than the 12.5x it said at the time.

Darden Officially Opposes A Special Meeting

Darden Restaurants said this week that it's opposed to a special meeting being called by the activist shareholder Starboard Value, citing the costs and the "risks" associated with a meeting.

Franchise Restaurant Hiring Slows Down

Despite a multitude of concerns, franchise restaurants went on something of a hiring tear last year, culminating in the addition of more than 23,000 jobs in December. But that growth has largely stopped.

Was Avenue Misled On Quiznos?

We wondered two years ago why Quiznos would be left with $600 million in debt on a restructuring. Now we have a possible explanation: The lenders that took ownership of the company at the time say they were misled by management on the company's financial projections.

Quiznos Files For Bankruptcy

Long struggling sub chain Quiznos filed for bankruptcy protection today. The prepackaged filing reduces debt by $400 million. The company plans to reduce food costs and make other efforts to put the chain back on strong footing.

Will Apollo Buy Dave & Buster's?

Apollo Global Management has one food-and-games chain, so why not buy the other? The private equity group is reportedly considering a bid for Dave & Buster's following its acquisition of Chuck E. Cheese, according to Bloomberg.

Papa Murphy's Files For An IPO

Papa Murphy's is taking its take-and-bake pizza to Wall Street. The Vancouver, Washington-based chain filed documents with the SEC for an IPO, the second growth restaurant chain to do so this week.

Sbarro's Earnings Fell Like A Brick

Documents filed in the bankruptcy of pizza chain Sbarro show how badly the concept has fared in the two years since it emerged from its previous filing. The company's earnings missed projections by a mile.

Cosi's Sales Take A Nosedive

Cosi, the Deerfield, Illinois-based bakery-cafe chain, said today that its sales have fallen off a cliff in the first two months of the year and it is now in a desperate search for cash.

Red Lobster Is In A Real Decline

Darden Restaurants filed documents with the SEC to spin off Red Lobster late yesterday. Those documents highlight the brand's decline in the past couple of years, as the chain has seen its sales and profits shrink.

Zoe's Kitchen Is Going Public

Another small restaurant chain is looking to get a piece of the premium that growth chains are getting on the public markets. Zoe's Kitchen, a 102-location Mediterranean fast-casual concept, filed documents with the SEC for an IPO.

Two Other Chains That Are Up Against The Wall

Sbarro has filed for bankruptcy, and Quiznos is reportedly close to doing the same thing. But those aren't the only chains that could face that same fate if their sales don't improve soon.

Sbarro And The Decline Of The Mall

Mall-based pizza chain Sbarro filed for bankruptcy protection this morning, just two years after it emerged from the last one. The only thing that has changed in that time is the number of potential Sbarro customers has dwindled.

Biglari Cements His Status

Various agreements that Sardar Biglari has with his company, Biglari Holdings, make it difficult for the investor to be ousted from his position. But we're not the ones saying that. It comes from the company's own annual report.

Why Are So Many Restaurant Chains Filing For Bankruptcy?

Two big chains, Sbarro and Quiznos, are reportedly close to filing for bankruptcy. Is this an industry-wide problem? Perhaps, but Fitch Ratings said today that the troubles show what happens when brands lose their relevancy with consumers.

Technomic: Operators Had A Tough Winter

According to Technomic, 40 percent of foodservice operators said that winter weather this year has had a negative impact on sales. The results are so bad that the consulting firm is reducing its restaurant sales estimate for the year.

Activist Bug Bites BJ's Restaurants

Patrick Walsh is targeting another restaurant chain. This time it's BJ's Restaurants, the suddenly struggling brewhouse chain. Walsh and his group of investors apparently mean business: They've nominated five people to the 10-person BJ's board.

Ignite Hedging Its Macaroni Grill Bet

Ignite Restaurant Group this week reported some ugly numbers for Macaroni Grill last quarter, including an 11-percent decline in traffic and a serious lack of profitability. But that doesn't mean the purchase was a mistake. Quite the contrary.

Bob Evans Had A Terrible February

Talk about your bad month. Last month, amid investor lawsuits and an activist looking to replace members of its board, weather was pounding Bob Evans' business. The company today said that weather had a profit impact of $5 million to $6 million last month.

Five Chains That Suffered Spectacular Declines

Quiznos' decline in recent years is one of the biggest, if not the biggest, in restaurant history. But it's not the only one. Here are five chains that collapsed. Remarkably, all but one are still around. And they're adding units.

Darden Defends Its Red Lobster Plan

Darden Restaurants this morning ended weeks of silence and went on a full-throated defense of its "value creation" strategies, and specifically poked holes into proposals to spin off its real estate.