Wednesday, July 30, 2008

Buh-Bye, Bennigan's

It's no secret that the hardest hit restaurants in today's economic crunch have been the mid-range, casual chains. It was a business due for a shakout nationally and the national chain Bennigan's appears to have been one of the latest casualties. Independent franchise locations will remain open, but corporate-owned Bennigan's across the US like most of those throughout the Chicago suburbs are closed as of yesterday. (More from Chicago's CBS affiliate.)


Anonymous said...

Hopefully Applebees is next.

Anonymous said...

I'm not personally a fan of Bennigan's; however, I never like to see any business go under.

Thousands of people had their jobs pulled out from underneath them this week. Hundreds of locations will now sit empty, decaying and likely becoming eye sores for several years to come.

Obviously those of us who read this blog are not going to be in the demo group who frequent these types of restaurants. Keep your eye on the ball and realize the impact of any business closing, even if it's one you are not a customer of.

braingirl said...

While I don't celebrate any business closing (I've owned my own, I understand), I do think there's a difference in pointing out when an entire industry -- the casual chain industry -- is beginning to re-align itself due to a change in its customers spending habits. It's been no secret in the restaurant world that the company that owns Bennigan's has been on the edge for a while.

Developers will move in to the strong locations. They'll tear down or they'll build something new. Progress will continue. (Too often, when you see vacant chain locations sitting, it's more a function of how the chain or corporation handles property transfer, not that the site itself is undesirable.)

It's always disappointing to see a company put its employees out with no notice. But in this market segment, the "ball" we're keeping our eye on is the overall saturation of chains -- and frankly -- a saturation of companies that provide a poor quality food product to a group of people perfectly happy to buy it.

If this middle segment of the market continues to re-align (as analysts say it will), it would be a great opportunity for a company to find a way to enter the market with a mid-price, casual healthy, hip, fresh-food based chain. (But from a business perspectives, there are other economies at work -- mass produced food that can be deep fried on site and carbs will always be cheap.)

Anonymous said...

Sorry BG, I edited my post for length and in hindsight took out an important part. I agree with the intent of your post- to discuss the restaurant industry and specifically the casual chain segment.

My comments were directed at the post of "hopefully Applebees is next." Which, to me, sounds like it was said simply out of a personal distaste for one business and nothing more. My comments were simply to point out that there are many broad impacts of a business closing other than eliminating us from having to hear Wanda Sykes being the voice of the Applebee's apple.

Anyone catch the cover piece in the new Indianapolis Monthly about
chain restaurants? Haven't had a chance to read it completely, but saw something were Indy has the most chains per capita-- yikes!

braingirl said...

Yes! Since I moved here, I'd heard that number -- and I'd also heard that we were one of the biggest test markets in the US for new chain concepts.

And while I hate the proliferation of them -- primarily because of the poor quality food -- I also recognize that at the high end, the fine dining level, sometimes chains have the capital to roll out a concept that ordinary investors never could.

(I did a post on the this topic a few years ago that I think I still agree with -- I'll start a discussion thread because I think you raise important points.)

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