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Forbes
a day ago
- 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 Others are quietly shrinking, stuck between rising costs, outdated models, and changing consumer expectations.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
2 days ago
- 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
Business Insider
06-06-2025
- Business
- Business Insider
I ordered the cheapest burger meal at Applebee's, Chili's, and TGI Friday's — one chain had the best value by far
I tried the cheapest cheeseburgers on the menu at Applebee's, Chili's, and TGI Fridays. Each affordable burger was properly cooked and served with plenty of fries. The best value was at Chili's, where my burger came with fries, a soft drink, and a starter. Fast food may still be quick and convenient, but rising prices are making it lose some of its appeal. On the bright side, the fact that it costs me $10 just to get a burger, fries, and drink at McDonald's is making sit-down chains look extra appealing. Turns out, I can get that order at several popular casual dining chains like TGI Fridays, Applebee's, and Chili's for about the same price. So, I visited each of them in search of the cheapest burger-and-fries combo on the menu. I wanted to see if I could get a good meal at a low price at these chains, and I was pleasantly surprised at all three — but one really stood out. TGI Fridays' burger was tasty, but my meal wasn't perfect. A cheeseburger and fries cost me $9.99 at TGI Fridays, though my meal didn't include a soft drink. My burger was perfectly cooked to my medium-well request and generously topped with lettuce, tomatoes, red onion, pickles, TGI Sauce (sweet and tangy), and cheese. The veggies were layered under the patty, with the cheese on top, which made the burger easier to eat. I appreciated how well it held together, especially as so many cheeseburgers devolve into knife-and-fork piles. The meat itself seemed entirely free of gristle, and the patty was a decent size — I'd estimate it was at least ¼ pound of beef, if not a bit more. My fries came out hot and had a nice crunch, but they were way too salty for me. They only made me wish my meal had come with a refreshing soft drink, but that would have cost extra. Fortunately, my water was still free and, overall, the meal was certainly well worth its price. The burger at Applebee's tasted great, but it was a mess to eat. To get the best deal on a burger meal at Applebee's, I ordered from the chain's Really Big Meal Deal menu. That menu includes several different burgers and a chicken sandwich priced at $9.99. Each comes with fries and a soft drink, meaning this meal was already a better value than the one I got at TGI Fridays. I went with the classic cheeseburger, which was a hit. It was cooked just right, with a bit of pink left in the center and a hint of char on the exterior. The lettuce, pickles, and tomato were stacked high, and the tasty, slightly sweet brioche bun seemed fresh. I appreciated the generous portion of toppings, but they made the patty slide off the bun with each bite. I needed to use a fork and a knife toward the end. The fries at Applebee's were hot, crunchy, plentiful, and not too salty. All told, this meal was entirely worth its price, messy burger and all. My burger at Chili's came with a starter. The cheapest burger I found at Chili's was on the chain's 3 for Me menu. I could get a burger with fries, a soft drink, and a starter, all for $10.99. The options for starters include a cup of soup, a house side salad, or chips and salsa. I went with baked-potato soup, which came heavily topped with bacon, cheese, and green onions. The portion wasn't huge, but as the soup seemed like a total bonus, I didn't mind. The burger and fries at Chili's were pretty decent, too. The burger I got at Chili's was pretty bare bones, but at least the patty was large — it was broad and flat, in a "smash" style — and cooked well. Plus, the bun tasted fresh. However, it felt like the most boring burger I tried, topped with just a tangy sauce, cheese, and a bit of chopped onion. I had expected the usual lettuce, tomato, or pickles (and think they would've paired well with the patty) but I didn't get any. This wasn't that big of a deal, though, as I was already half sated from my bonus starting course. The fries at Chili's were thick and had just the right amount of salt. They were pleasantly complemented by my ginger ale (also included with my meal). All things considered, I'd probably head back to Chili's first. Each meal cost an extra $2 or so after tipping my servers. Even still, I felt the prices I paid were fair across the board. In terms of final thoughts, I was bummed my affordable cheeseburger at TGI Fridays didn't come with a soft drink. At Applebee's, I got a drink, burger, and fries — but at Chili's, my burger was accompanied by fries, a beverage, and a starter, making it far and away the best deal. Although the Chili's burger wasn't my favorite, it was still good. If it had been more heavily topped, it would've been on par with the ones from Applebee's and TGI Fridays.
Metro
28-05-2025
- Business
- Metro
American restaurant announces ‘major comeback' in UK with first-ever breakfast menu
It's been 39 years since American chain TGI Fridays launched here in the UK, with the first restaurant opening in Birmingham in 1986. Since then, they've opened dozens more and today they have 49 locations nationwide. The chain's parent company Hostmore went into administration in October 2024 which saw a number of sites shutter, but the brand has since been purchased by Breal Capital and Calveton (Evolv Collection), with a major relaunch planned for July 4. As part of this, the menu is being overhauled both here and across the pond, with TGI Fridays launching its first-ever breakfast offering in the UK, as part of what Simon Wilkinson, board director and operating partner at Evolv and TGI Fridays, described as 'the comeback of all comebacks'. The new 'Rise and Dine' menu is available now at more than 20 of the chain's restaurants and prices start from £5. Dishes available include a bacon ciabatta (£5), a Breakfast Melt featuring pulled beef, pulled pork or crushed avocado (from £6.50) and a literal tray of food known as the All-American Slam (£10.95). This beast of a breakfast features pork sausages, bacon, fried eggs, sautéed mushrooms, baked beans, grilled tomato, hash brown bites and toasted ciabatta bread. Still hungry? Another new dish boasts an 8oz steak, mushrooms, grilled tomato, a fried egg and hash brown bites for £14.95. And for those who prefer something a little sweeter, there's also a triple stack of pancakes topped with Oreo crumble and vanilla ice cream (£8) or the Big New Yorker (£9) which sees pancakes topped with maple glazed bacon, crispy chicken strips, a fried egg and maple syrup. Vegetarian options will be available too, incluidng The Garden State Slam (£10.95) made with plant-based chicken, smashed avocado, Cajun-spiced corn chips, fried eggs, hash brown bites and toasted ciabatta. And there's a Hash Brown Stack (£7) where the bites are loaded up with melted cheese, pink pickled onions and a fried egg before being drizzled in a maple siracha dressing. Those who fancy it can also add BBQ pulled pork or maple glazed bacon too. No menu change would be complete without a few new drinks, which TGI Fridays are calling 'Sunrise sips'. These beverages are available in the morning for £5.73 each and include the Gold Medalist (banana, strawberry, pineapple and grenadine), Fresh as Cucumber (cucumber, lemon, elderflower, cranberry and soda water) and Minty Apple Soda (apple, vanilla, mint and soda water). A selection of fresh apple, cranberry, orange or pineapple juice is also available for £4 each. Full list of TGI Fridays locations that offer breakfast: Birmingham NEC (event days only) Bluewater Bournemouth Braintree Crawley Cribbs Causeway Doncaster Glasgow Fort High Wycombe Junction 27 Lakeside Quay Leeds White Rose Liverpool One Meadowhall Milton Keynes Milton Keynes Stadium Norwich Nottingham Rushden Lakes Silverburn St David's (Cardiff) Teesside Telford The O2 Trafford Centre Union Square Aberdeen Watford Central Wembley Do you have a story to share?
