America's disappearing restaurant chains

By Charles B. Stockdale

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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