America's disappearing restaurant chains
These 10 once-loved eateries now register the biggest sales declines in the business.
There is a school of thought that says the restaurant business is always a good business because people need to eat. A glance at the sales of many of America's largest restaurant chains over the past decade quickly dispels that myth.
Using data provided by food industry research firm Technomic, 24/7 Wall St. has looked at the 10 restaurant chains with the greatest decline is sales from 2001 to 2010. In every case, sales have fallen 60% or more.
Many restaurants on this list are casual family-dining establishments. Most offer American-style cuisine -- steaks and burgers -- in a bar or grill setting. These restaurants -- including Bennigan's, Ground Round and Damon's -- expanded quickly during the 1990s. But their presence was overshadowed by newer restaurants that consumers found more exciting, such as Applebee's. Even now, new fast-casual restaurants such as Buffalo Wild Wings and Chipotle are outselling, and in many instances replacing, older restaurants.
Of course, economic factors also have contributed to a drop in restaurant attendance. Most of the restaurant chains on our list have filed for bankruptcy and closed large numbers of restaurants over the past decade.
These are America's disappearing restaurant chains:
1. Bennigan's Grill & Tavern
- Change in sales (2001-2010): -87.9%
- Sales 2001: $565 million
- Sales 2010: $68.5 million
- Change in units (2001-2010): -87.5%
Bennigan's is an Irish-themed casual-dining restaurant with locations nationwide. In July 2008, the restaurant filed for Chapter 7 bankruptcy protection. The company closed its 160 corporate-owned locations, laying off approximately 10,000 employees. Of the 138 franchised locations that avoided the bankruptcy filing, only 35 remained as of 2010.
2. Ground Round Grill & Bar
- Change in sales (2001-2010): -81.7%
- Sales 2001: $225.25 million
- Sales 2010: $41.25 million
- Change in units (2001-2010): -80.9%
Ground Round is a casual-dining restaurant chain that serves burgers, steaks, Tex-Mex and more. It has locations in the Midwest and the Northeast. In February 2004, the restaurant's parent company declared bankruptcy, immediately ceasing operations at 59 company-owned restaurants on a Friday night before the dinner rush. The 72 franchise locations remained open. Ground Round is now owned by Independent Owners Cooperative, LLC, a group of 30 franchise owners. As of 2010, only 25 Ground Rounds remained in business.
3. Bakers Square
- Change in sales (2001-2010): -72.2%
- Sales 2001: $220 million
- Sales 2010: $61.2 million
- Change in units (2001-2010): -69.6%
4. Damon's Grill & Sports Bar
- Change in sales (2001-2010): -69.8%
- Sales 2001: $284.84 million
- Sales 2010: $86 million
- Change in units (2001-2010): -72.3%
Damon's, based in Columbus, Ohio, is an American-style restaurant that emphasizes prime rib, grilled steaks, chicken, seafood, salad and ribs. The restaurant, which also positioned itself as a sports bar, ran into tough times in 2006 as the quality of home entertainment improved enough to keep sports fans at home. This was an aspect of the business the restaurant depended on. The chain had 137 restaurants in 2001, but only 86 in 2007. The company has begun reformatting its restaurants, altering their interiors, menus, and logo. Today, however, there are only 38 Damon's locations.
5. Don Pablo's
- Change in sales (2001-2010): -69.8%
- Sales 2001: $268.25 million
- Sales 2010: $81 million
- Change in units (2001-2010): -70.2%
Don Pablo's is a national chain that serves Tex-Mex-style food. In September 2007, Avado Brands Inc., the parent company, filed for Chapter 11 bankruptcy. The company sold a number of its assets, including many buildings that were subsequently auctioned off to other restaurants, such as Buffalo Wild Wings. From 2001 to 2010, the number of Don Pablo's fell from 131 to 39.
6. Gloria Jean's Coffees
- Change in sales (2001-2010): -69.1%
- Sales 2001: $135 million
- Sales 2010: $41.75 million
- Change in units (2001-2010): -73.6%
Gloria Jean's Coffees was founded in Chicago in 1979. By 1995, the brand spread to Australia, where it is a huge success today. In the U.S., the brand, which was owned by Diedrich Coffee, expanded rapidly, reaching 330 locations by 2001. The expansion proved too much for the company, which began to have financial troubles. Diedrich sold the international segment of Gloria Jean in 2005. In 2006, it sold a large number of cafes to Starbucks. In 2009, Diedrich sold the remaining Gloria Jean's Coffees to Praise International North America. As of 2010, only 87 cafes remain.
7. Big Boy
- Change in sales (2001-2010): -68.6%
- Sales 2001: $580 million
- Sales 2010: $182.25 million
- Change in units (2001-2010): -65.2%
Big Boy is the restaurant with the most locations on this list. It is also perhaps the most well known. In 2000, the company's owner, the Elias Bros. Corp., declared bankruptcy after experiencing cash-flow problems and difficulties with expansions. The month before it filed for bankruptcy, the company closed 43 restaurants. The restaurant, which specializes in double-decker hamburgers, has not done very well since. In 2001 Big Boy had 405 locations. By 2010, that number had decreased to 141.
8. Tony Roma's
- Change in sales (2001-2010): -67.3%
- Sales 2001: $318.22 million
- Sales 2010: $104 million
- Change in units (2001-2010): -72.2%
Tony Roma's is a casual-dining restaurant that markets itself as specializing in ribs, seafood and steak. Over the years, the number of Tony Roma's restaurants has dwindled, largely because of a decline in the brand. On a national scale, the number of Tony Roma's has dropped from 162 to 45 between 2001 and 2010. However, the restaurant maintains a large international presence.
9. Country Kitchen
- Change in sales (2001-2010): -67.2%
- Sales 2001: $250 million
- Sales 2010: $82 million
- Change in units (2001-2010): -74.3%
Country Kitchen is a rustic home-style restaurant that serves self-described "comfort foods." From 1977 to 1997, the brand was owned by Carlson Cos., which deals primarily with hotels. It is perhaps unsurprising that many Country Kitchens are attached to travel plazas and hotels. Overall popularity of the chain has fallen dramatically, with the number of restaurants dropping from 249 in 2001 to 64 in 2010.
10. Black Angus Steakhouse
- Change in sales (2001-2010): -62.3%
- Sales 2001: $302.16 million
- Sales 2010: $114 million
- Change in units (2001-2010): -57%
Black Angus Steakhouse currently has 46 restaurants in six Western states. As of 2001 it had 107 restaurants. ARG Enterprises, the restaurant's former owner, filed for Chapter 11 bankruptcy in 2004 and then again in 2009 before being purchased by Versa Capital Management. Many Black Angus Steakhouses were in areas that were hit exceptionally hard by the mortgage crisis, causing business to decline significantly.
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Gee, I wonder why these places are going out of business. Bad food quality, frozen food, dirty restaurants, bad service, over priced. Anything I forgot?
Yesterday I had a awesome burger, fries and shake from In and Out Burger. The place was spotless, service was friendly and prompt, and most importantly, the food was fresh, not frozen, and freshly made. I also was able to order the food customized the way I prefer it.
It's not rocket science.
The goverment should start investing in small business.Sorry, but the Government doesn't have ANY business investing in ANY business. Let private enterprise do the investing.
Having been in the Food and Beverage business for 30 years, I have a few observtions for the failure, and ultimate demise of these chains. They are RELICS. Conceptually not able to keep pace with the ever changing restaurant business landscape. Outpaced, outdone, and outperformed by newer, keener, and ultimately more appealing to a, pardon me, fickle customer base. It also is worth mentioning that the business model used in the inital success of their brand, probably did not translate ultimately, when they took their brand to a national level(rapid expansions is a dangerous problem for any retailer).
The economy hurts everyone, but we can all agree there are many more options when it comes to dining, then ever before. These operations could not keep up with new competition, for various reasons. Even supermarkets are now involved with meals to go, offering better quality, and better value than some of the operations mentioned in this report.
It is not Congresses fault
It is not Obama's fault
It is not the Chinese's fault
It is there own fault
I like this, but you've got it backwards (like Boenhead)...with no JOBS there's no Money to spend, and therefor not profits and no business.
It is a shame that some of these places have not fared well in the past years, but many times it is because the quality of the original owners was lost in the sale. Many restauranteurs still have no clue when it comes to buying a chain, just what made it so popular, and why the customers keep coming back. Such was the fate of Tony Roma's, and also Marie Callendar's (which is not mentioned in the article). Once the chains were sold, the stupidity of corporate America set in, and quality went downhill fast. Customers looked elsewhere, and pretty soon, cuts had to be made. The buyers of these two chains had no clue has to what drew people in, and made changes to menus and atomosphere based soley on the bottom line. When customers started to complain and sales dropped, corps turned a deaf ear because "they know best." What a joke.
One restaurant I am SHOCKED didn't make the list is Boston Market. That is always the first one I think of in regards to declining.
Chain Restaurants are being demolished because value has declined significantly:
Number of restaurants shot up to capitalize on volume and profit
Menu prices went up to support expansion and profit
Calories,Sugar and Salt content have become egregious
Noise level is ridiculous
Waiting time due to labor reduction
Efficiency due to a lack of attention
People are becoming more discriminatory and for those who are not their health will suffer. Most folks want to come into a place, be greeted, be able to hear one another talk, have a moderately priced meal that is freshly served and made with healthy ingredients, treated in a friendly manner and encouraged to come back by a waiter or waitress that has an ability to wait the table without being intrusive or nonchalant.
Anyone in MI remember Bill Knapp's?
If you can't at least keep your place clean and give people food they want at a price they're willing to pay, then yes, you'll be heading out of business no matter what the economy's doing.
Can't WAIT to see the Applebee's on this list! I stopped going there after I was served my food twice in a row with reminants of the plastic bags they microwave their food in STUCK to the plate. Yes, that's right people, they don't cook your food. It all comes frozen and they heat it in a microwave.
The third (and last) time I went they completely FORGOT about me. I mean everyone else at my table got their food and I didn't! When the waitress came to see if everything was good she even had the nerve to ask if I'd like some desert since I'd finished my meal. The manager wanted to comp my food, but I had to tell him to comp someone else's because I was never going to another Applebee's, EVER. BTW these incidents happened at three DIFFERENT stores.
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