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Miami Herald
5 days ago
- Business
- Miami Herald
Struggling burger chain closing restaurants, won't raise prices
The line between success and failure in fast-casual sit-down restaurants seems unbelievably narrow. Chili's, for example, has been flying high based on offering low prices and delivering good value. Applebee's has struggled overall, but had success when country singer Walker Hayes name checked the brand in his song "Fancy Like." Related: Starbucks menu leak reveals an exciting new drink Many other chains in this space have struggled. Hooters remains under Chapter 11 bankruptcy protection while TGI Fridays and Red Lobster went through that process and came out the other side. In some cases, like Hooters and TGI Fridays, you can blame the product. Hooters offers a dated business model that's more than a little sexist. Fridays let its menu get stale and lost its feeling of being a step ahead of other players in the same space. Don't miss the move: Subscribe to TheStreet's free daily newsletter Consumers have also gotten a little more careful with their cash. They might trade down from sit-down to fast casual or even opt for a fast-food meal deal. It's a tough market and surviving requires an aggressive plan of action. While no business wants to get smaller, it's important to be decisive in cutting locations that don't contribute to the bottom line. It's more a situation of cutting out the cancer so the rest of the body can be healthy. Along those lines. Red Robin will close up to 15 underperforming restaurants in 2025. The chain could close up to 70 locations over the next several years. Red Robin has been closing stores on an efficient basis, largely waiting until their leases expire. That minimizes the financial hit the company takes when it shuts down a restaurant. Closing unprofitable locations is only part of the chain's turnaround plan. It's also doing two big things improve its relationship with its customers. More Retail News: McDonald's brings back unexpected breakfast item after 6 yearsIconic fast-food burger chain announces late-night hours expansionMcDonalds' menu brings back breakfast items Chick-fil-A fans love First, it's making a key pricing promise. "We've also included a cost headwind based on current tariff policies. I would note, we are not planning any menu price increases in the remainder of 2025. We anticipate absorbing the current expected impact of tariffs as we prioritize maintaining value for our guests. The great work of our operators to capture cost savings greater than we initially planned supports this approach," CFO Todd Wilson said during Red Robin's first-quarter earnings call. Holding prices level, after they increased by about 6% in the previous year, should help Red Robin's relationship with its customers. The chain has also made meaningful improvements to its loyalty program. That has already produced some meaningful results. "I would tell you that we are seeing the same kind of increase that we talked about last quarter. And I'll also tell you that some of these numbers, like 22% of our visits are from lapsed users, that's a really good number in terms of our visits overall. And we're holding fairly close to new guests being 20% of our visits. So this program is really working," Wilson said. He also expects the momentum to continue. "And I think as we dial this thing up further, there's further opportunity here," he added. Related: Largest fast-food chain's franchisee files for Chapter 11 bankruptcy CEO David Pace agrees with his CFO. "I think there's still significant opportunity in the program, the strength of it to grow it and also to how we use it. I think there's an opportunity for us to be smarter about how we implement and use pieces of the program. Not that we've been bad at it, I think we're just learning and we're getting better as we go. So I think there's still significant upside there," he shared. The revamped loyalty program allows members to earn rewards faster in order to encourage more frequent visits. Membership crossed 15.3 million people at the end of the first quarter. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Daily Mail
24-06-2025
- Business
- Daily Mail
TGI Fridays rival follows chain into mass closures as BBQ joints collapse across the country
Smokey Bones BBQ is inching closer to a full shutdown after announcing another round of mass closures. The TGI Fridays rival is shuttering nine restaurants this year, reducing its footprint to around 45 locations. That number is expected to shrink further in the coming years as more sites are converted into Twin Peaks sports bar-style restaurants. Once a rising star in casual dining, Smokey Bones launched in 1999 under Darden Restaurants, the company behind Olive Garden. At its peak, it boasted more than 130 locations nationwide. But the brand has struggled since its parent company acquired Twin Peaks in 2021. TGI Fridays had already been suffering financial downfall before the Smokey Bones' decline, ultimately filing for bankruptcy last year. Like Smokey Bones, the chain has undergone mass closures, with only 200 US locations remaining open. Its owners are continuing to keep a close eye on it, and revealed that it's 'very possible' for more Smokey Bones restaurants to shutter. Smokey Bones explained it has three specialties: Good food, good drinks, and good times. The chain began hopping around different owners after Darden decided to sell it to Barbeque Integrated, Inc., a company affiliated with Sun Capital Partners, Inc. The $80 million acquisition agreement was finalized in 2007, and by 2010, the 68-unit chain was undergoing a multi-million dollar redesign in all locations. Unfortunately, Sun Capital Partners, Inc. became financially unstable over the years due to owning struggling chains like Friendly's and two-time bankruptcy filer Bar Louie's. The company sold the chain to Fat Brands for $30 million in 2023, and are busy working on the restaurant transformations. 'We still plan to convert about half of Smokey Bones' locations to Twin Peaks over the next several years. We will then keep 20 or so locations as Smokey Bones with nine locations closing due to factors such as the lease expiring or the trade area,' a spokesperson told 'As we have shared previously, we are committed to growing Smokey Bones and see great potential for the brand as the only BBQ concept in our portfolio. Our first priority is completing the conversions and then we will execute on our growth strategy.' While Fat Brands has mapped out what it believes is a solid plan, the company suffered a sales dive during this year's first quarter, with its total revenue declining by 6.5 percent. There has been a habit of once-thriving restaurant chains going downhill over the last few years. Darden shuttered 15 Bahama Breeze restaurants following low profits and is exploring the idea of selling off the remaining locations. Hooters abruptly shuttered 30 restaurants this month after filing for bankruptcy protection, and Hogan's Real American Beer has reportedly been interested in purchasing the chain's intellectual property. Other chains that have filed for bankruptcy this year include Planta, Hwy 55 Burgers, Shakes & Fries, and On The Border Mexican Grill & Cantina.
Forbes
19-06-2025
- Business
- Forbes
Why Private Equity Is Coming For Casual Dining
Arlington Heights, IL, USA - August 14, 2024: Olive Garden is a popular American casual dining ... More restaurant chain specializing in Italian-American cuisine. You can't charge $18 for a mediocre burger anymore and expect to survive, especially with private equity circling. The era of casual dining has come to an end. Nostalgia isn't enough to keep the doors open, and the cracks are turning into collapses. TGI Fridays just filed for bankruptcy. Jack in the Box is flailing. Others are quietly shrinking, stuck between rising costs, outdated models, and changing consumer expectations. To most, it looks like an industry in terminal decline. However, investors who are paying attention perceive a sector that is poised for transformation. Behind the failing units and flatlined comps lie brands with real equity, untapped assets, and inefficient structures screaming for reinvention. For private equity, activist investors, and special situation specialists, this isn't a graveyard, it's a treasure map. The restaurant industry is being repriced. And those who know how to restructure from the inside out are already sharpening their knives. Restaurant chains can be highly profitable when managed with discipline. Many operate on asset-light, franchise-heavy models that throw off steady income with minimal capital intensity. Others sit on under-monetized real estate or legacy leases that, if unlocked, can reshape the balance sheet. And while their operations may be stale, their brand equity still carries psychological weight with consumers. That's a dream set up for private equity and special situation investors. Why? The sector is overflowing with fragmentation, inefficiency, and strategic bloat, which are the very traits that smart capital seeks when hunting for mispriced opportunities. Most public restaurant chains today are overly complex, mismanaged, or stuck in a strategic identity crisis. The stock prices reflect that. But behind the scenes, there's real potential not for a revival of the old model, but for a reinvention of what these businesses could be with the right financial structure and operational reset. The gap between public market valuations and private market potential is again widening, and for those with the tools to execute it, the upside is being served right now. Our previous idea with the Cheesecake Factory was a winner. Once a cornerstone of American casual dining, TGI Fridays now faces bankruptcy. Private ownership wasn't enough to save it. Why? The reasons include a stale concept, slow innovation, and operational complacency. The brand didn't evolve, and the market moved on. Jack in the Box isn't faring much better. Despite decades of existence, Jack in the Box's sales remain stagnant, its strategy appears confused, and investors are becoming increasingly uneasy. The problem extends beyond performance; it also involves a vacuum in leadership and identity. Then there's Red Lobster. Red Lobster's recent bankruptcy serves as a prime example of financial engineering gone wrong. But look closer: it still has name recognition, real estate value, and a loyal customer base. Mismanagement, not irrelevance, sank the ship. The pattern is clear. These aren't businesses that failed because dining is dead. Leadership stagnated, complexity escalated, and there was no accountability. None of these collapses were inevitable. With aligned incentives and operational clarity, many of these names could have been restructured, not written off. A view of TGI Fridays on the New Mersey Retail Park, in Speke, Liverpool, one of 35 of the chains ... More restaurants to close with immediate affect with the loss of 1,000 jobs. TGI Fridays will remain on UK high streets following a rescue deal for the chain. Breal Capital and Calveton UK have acquired 51 restaurants after the group's previous operator fell into administration. Picture date: Monday October 7, 2024. (Photo by Peter Byrne/PA Images via Getty Images) Red Lobster's recent bankruptcy serves as a prime example of not wanting things to be flawless. They seek undervalued assets, scalable operations, and straightforward revenue streams. The restaurant industry currently possesses all three of these characteristics. Many of these chains still have strong brand awareness, large franchise networks, and even hidden real estate value. However, high costs, outdated menus, and unclear strategic priorities conceal these strengths. A typical playbook shows the same problems: inadequate capital allocation, too many buybacks while innovation slows down, and franchising plans that aren't consistent or scalable. The chance? You don't have to come up with a new way to do things. You merely need to clean up the model, make operations more efficient, and put growth ahead of financial engineering. That includes changing the prices on the menu to match what customers want and to show how much money the business can really make with better management. This is not a consumer collapse, which is beneficial. The restaurant industry currently possesses all three of these characteristics. desire a clear, high-quality experience. Brands that simplify their operations, maintain focus, and deliver quality services will succeed in the future. They should refrain from trying to cater to everyone's needs. In summary, the restaurant business remains intact. It just needs someone with the willpower to fix it. Ottawa, Canada - May 12, 2024: Red Lobster location on Merivale Rd. The casual dining restaurant ... More chain, headquartered in Orlando, Florida, announced in April that it was searching for a new buyer or a possible bankruptcy filing. 1. Stale Stock Price With Strong Brand Recognition → A lagging share price doesn't mean the brand is dead. If it still resonates with consumers, there's room for a strategic reset. 2. Franchise-Focused Model That's Mismanaged → Franchises generate recurring, high-margin cash flows. Poor oversight or inconsistent execution is a fixable flaw—one activist's love. 3. Insider Ownership Trends Or Quiet Accumulation → Watch for insider buying or outside investors quietly building a position. It often signals someone sees untapped value. 4. Declining Same-Store Sales Without Structural Decline → A short-term sales dip is a red flag—but only if it's a trend. If the concept still works, operational fixes can drive a rebound. 5. Inefficient Capital Allocation Or Corporate Bloat → If cash is flowing into buybacks or debt service instead of innovation, it's an open invitation for change. Even across the Atlantic, activist investor Irenic Capital has taken a 2% stake in SSP Group, the operator of Upper Crust and other travel food outlets. The hedge fund is pressuring management to improve margins, suggesting the stock could be worth twice its current valuation. The move sets the stage for a potential private equity takeover, echoing a broader trend: undervalued consumer-facing brands with operational inefficiencies are now prime targets for strategic resets. The market hasn't fully considered the value of many of these struggling restaurant brands yet. But that window won't stay open for long. When private equity and activist investors start circling again, multiples will change, and the chance to buy before restructuring starts will go away rapidly. Smart investors are already looking for inefficiencies, poorly allocated cash, too many layers in a company, and assets that aren't being used to their full potential. Only the most disciplined or forward-thinking capital will respond quickly when interest rates are high. Everyone else will be late and must pay more for something they could have had for less. What will happen to the businesses that refuse to change? They won't simply vanish; instead, they'll undergo dismantling, sale, or render useless. This sector is already starting to change shape. The only question to consider is who will enter the market early enough to take advantage of it?
Miami Herald
18-06-2025
- Business
- Miami Herald
Popular restaurant chain franchisee files Chapter 11 bankruptcy
The Covid pandemic forced many restaurants to adjust to a new normal based on health safety protocols meant to prevent the spread of the potentially deadly disease. In March 2020, restaurants across the nation closed their doors but soon reopened with social distancing and safety protocols. Don't miss the move: Subscribe to TheStreet's free daily newsletter Fast-food restaurants were designed with take-out and drive-thru systems that allowed them to continue operating as if nothing happened, though many shut their dining rooms for many months for safety reasons. Related: Major nationwide trucking company files for Chapter 11 bankruptcy Casual restaurants did their best to offer take-out and curbside pick-up systems, but some restaurant concepts, such as buffets, were not designed for such systems, did not adopt them, and many went out of business. Some of the most significant restaurants to suffer the effects of the pandemic filed for bankruptcy over the last year. Seafood chain Red Lobster, which filed for bankruptcy in May 2024, closed about 187 restaurants. The dining chain emerged from Chapter 11 in September 2024 and now operates about 478 locations in 44 states. More bankruptcy: Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy Bar and grill chain TGI Fridays had 161 U.S. locations when it filed for Chapter 11 bankruptcy on Nov. 2, 2024, to reorganize and closed 76 locations. The restaurant chain listed 85 U.S. locations on its website in April. Italian restaurant chain Buca di Beppo closed 18 locations last year before it filed for Chapter 11 bankruptcy protection on Aug. 4, 2024, to reorganize its business with the support of its lenders. The restaurant chain on Nov. 4 won approval to sell its 44 remaining corporate-owned restaurants to its lender Main Street Capital Corp., with a credit bid of $27 million. But it was buffet restaurants that were hit the hardest by the pandemic, with several filing for bankruptcy months after the beginning of the pandemic. National buffet chain Hometown Buffet's parent Fresh Acquisitions LLC filed for Chapter 11 in April 2021, suffering from the effects of the Covid pandemic and closed down permanently. The chain had struggled for years as the previous owner, Buffets Inc., filed for bankruptcy in 2008 and 2012 before selling the company in 2015, just before the chain's new owners filed Chapter 11 again in 2016. Other buffet restaurants also felt the harsh effects of the Covid pandemic and were forced to file for bankruptcy. Golden Corral franchisees were among the buffet restaurant owners to file for bankruptcy as the pandemic subsided. The buffet restaurant chain's largest franchisee at the time, 1069 Restaurant Group LLC, filed for Chapter 11 bankruptcy in October 2020, and its second-largest franchisee, Platinum Corral LLC, filed for bankruptcy in April now fast-forward to 2025, and another franchisee of Golden Corral has filed for Chapter 11 bankruptcy to reorganize its business. South Texas Corral LLC filed its Subchapter V petition on June 17 in the U.S. Bankruptcy Court for the Southern District of Texas, listing $150,000 in assets and $1.64 million in liabilities. Related: Popular smoothie chain franchisee files for Chapter 11 bankruptcy The Brownsville, Texas, Golden Corral franchisee did not reveal a reason for filing for bankruptcy in its petition. Golden Corral, which launched in Fayetteville, N.C., in 1973, operates about 351 restaurants in 39 states and Puerto Rico, with most of them run by franchisees. The restaurant chain claims to be the nation's largest grill buffet restaurant chain. It serves all-you-can-eat breakfast, lunch, and dinner, featuring various grilled steaks, ribs, barbecue beef, brisket pot roast, meatloaf, burgers, sandwiches, chicken and wings, soups and salads, and various breakfast items. Related: Popular local Dairy Queen rival files for Chapter 11 bankruptcy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
11-06-2025
- Business
- Yahoo
CPI report: Inflation eases in May around Trump's tariffs
May's Consumer Price Index (CPI) saw inflation rise by 0.1% month-over-month — below economists' forecasts of 0.2% — and 2.4% annually, coming in line with year-over-year estimates. Core CPI — which excludes food and energy prices — also saw its inflation readings cool in May, rising only 0.1% monthly (vs. 0.3% forecasts) and 2.8% annually (vs. 2.9% forecasts). Morning Brief anchors Brad Smith and Madison Mills dive into the breaking report on consumer prices. The Producer Price Index (PPI) is due out on Thursday. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. CPI month over month coming in a touch soft, the survey indicating two tenths of a percent growth. It actually came in at .1%. Year over year being in line with estimates, coming in at 2.4%. CPI ex-food and energy year over year also coming in just a tick below the survey number, coming in at 2.8%. That is below the indicated survey number of 2.9%. Also want to get you the CPI core index coming in just a bit soft as well. And again, we have CPI ex-food and energy month over month. That's actually the softest number, coming in at .1%. That is below the survey data of .3%, and also below the prior month's reading, which came in at .2%. Taking a look at futures moving to the upside firmly off the back of this print perhaps, indicating a slower inflation picture than we had thought, given tariff policy. Yeah, fractional gains for the US major averages. A few of the indexes that I like to keep track and tabs on here, the food index, specifically, uh, near and dear to a lot of people's stomachs out there. Food index increased three-tenths of a percent as both of its major components, the index for food at home and the index for food away from home. So those of you still getting those margarita deals at TGI Fridays, you're still going out there in full force here. The rose by about three-tenths of a percent though, in May. In contrast, you actually saw the energy index decline 1%. We've heard a lot of economists kind of lean into where we've seen some retreat in the price of gasoline. That, uh, gasoline index fell over the month as well here. So that was noteworthy here. You also did see a few of the areas here, the indexes for airline fares, used cars, trucks, new vehicles, and apparel among the indexes that decreased in May as well. So a lot to keep tabs on there, especially within the retail landscape. Yeah, and something I think that will be interesting to talk to our guests about is that there was this concern about goods leading to a big uptake given tariff policy. But we actually saw the index for shelter rising three-tenths per percent. That was the primary factor in the all items monthly increase. So we have a soft inflation print driven by shelter as opposed to goods inflation as well. Spot on. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
