America's disappearing restaurant chains

These 10 once-loved eateries now register the biggest sales declines in the business.

By MSN Money Partner Oct 14, 2011 10:27AM

Image: Care © Moxie Productions/Blend Images/Getty Images247wallst.comBy 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%
Bakers Square is a casual-dining restaurant that, although serving breakfast, lunch and dinner, is best known for its pies. The restaurant is located primarily in the Great Lakes region and in California. In April 2008, parent company VICORP, now American Blue Ribbon Holdings, LLC, filed for Chapter 11 bankruptcy because of declining restaurant sales and high lease rates. The company closed 56 stores, including the original Bakers Square in Des Moines, Iowa. Only 45 Bakers Square restaurants remain, compared to the 148 that existed in 2001.

 
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.

 

More from from 24/7 Wall St.

VIDEO ON MSN MONEY

96Comments
Oct 14, 2011 2:40PM
avatar

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.

Oct 14, 2011 3:02PM
avatar
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. 

Oct 14, 2011 2:55PM
avatar

Folks,

 

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

 

 

    

Oct 14, 2011 2:27PM
avatar
Like my wife always said " I can buy a new outfit for the price of this meal!"  She cooks at home and dresses nice.  Moral to my story, Better to cover your a##, than eat one.
Oct 14, 2011 2:43PM
avatar
we use to eat out several times a week now we only eat out if we are traveling or just want something easy maybe once a month we aren't the only people who eat at home more then out at a restaurant.
Oct 14, 2011 1:28PM
avatar
They list the last 10 years worth of performance. I would be curious to see the change from 2008 to 2010. Has this been a steady decade-long decline? Or has the dropoff occurred in the last 2-3 years due to the economy?
Oct 14, 2011 1:15PM
avatar
THE RESTAURANTS ARE LOSING SALES BECAUSE THERE RAISING PRICES EVERY COUPLE OF MONTHS AND CUTTING BACK ON QUALITY OF FOOD AND SMALLER PORTIONS IN THIS BAD TIMES OF PEOPLE MAKING LESS MONEY AND BEING LAID OFF PEOPLE CAN NOT AFFORD TO GO OUT I RUN A SMALL AUTOMOTIVE GARAGE AND I KEEP MY PRICES AT THE SAME LOW PRICES AND I MAKING MORE MONEY THAN I DID WHEN THINGS WERE BOOMING JUST GOES TO SHOW YOU CORPORATION IS ALL ABOUT PROFIT THE RICH GETTING RICHER WAKE UP AMERICA STOP PAYING HIGH PRICES FOR LESS  OUR RICH SENATE AND CONGRESS PEOPLE WILL KEEP GIVING BACK TO THE RICK FORGET US LOW PAID WORKERS TO FIX THIS PROBLEM WE NEED TO TAX CORPORATION THAT KEEP SHIPPING JOBS OVER SEAS  GIVE TAX BREAKS TO KEEP YOU JOBS HER IN AMERICA
Oct 14, 2011 1:31PM
avatar
It all boils down to, NO PROFIT, NO BUSINESS, NO JOBS, NO money to spend.
Oct 14, 2011 2:25PM
avatar
For me, it's not only less money to eat out with overall, but I also make a much bigger effort to go to non-chain stores and restaurants now.  I would rather spend $10 more on 1 meal at a local pizza restaurant my neighbors own, than be able to eat pizza twice a month at Domino's or whatever.

Oct 14, 2011 1:50PM
avatar
"It all boils down to, NO PROFIT, NO BUSINESS, NO JOBS, NO money to spend."

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.
 
That's because the Investor class has the Chinese doing their work for them instead of Americans.
Oct 14, 2011 2:36PM
avatar
I think the demise of these chain resaurants is solely caused by managerial greed for more and more until they lose control. These people want to blame the economy, the truth is they bleed the company dry taking out the money and paying themselves or expanding faster than the stores could return an income to cover the costs.
Oct 14, 2011 2:24PM
avatar

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.

Oct 14, 2011 1:07PM
avatar
I'm only aware of 7, 8, 9 & 10.  The worse out of these 4 is The Black Angus.  About 20 years ago the food was awesome...today I wouldn't give you a nickle for the garbage they serve.  Another one that should be on the list is - Applebees.  The worst..and I mean the worst food ever. Sick
Oct 14, 2011 12:43PM
avatar

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.

Oct 14, 2011 2:25PM
avatar
The economy only sped up the demise of some of these.  I've been to every one of them at one time or another and some were done in by management, or lack thereof.  But there are still a lot of folks dining out so blaming it on the economy doesn't cover the topic.  People are just more discriminating with their dollars.  And it's not only low-end.  I won't go to Morton's again at gunpoint.  The only thing saving some of the high-end restaurants is their 'see and be seen' image.  Grade them solely on food and they're toast. 
Oct 14, 2011 3:22PM
avatar

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.

Oct 14, 2011 12:47PM
avatar
Man, I remember Baker's Square when it was still "Poppin' Fresh Pies"!  (How old does THAT make me? Smile)  I live in SD but whenever I'm in the Midwest I always make it a point to find one and get my French Silk pie!  Hopefully they'll find a way to stay alive.

Anyone in MI remember Bill Knapp's?

Oct 14, 2011 12:59PM
avatar
Are you sure the recession, the high unemployment rate has nothing to do with the decline? I'm sure if the people  didn't pay mortgage and let there house go into foreclosure, I'm sure they are not spending money on going out to eat.
Oct 14, 2011 3:48PM
avatar
I've got a lot of good memories from eating at Bennigan's a decade or two ago when I was younger and less discriminating.  But the last time I went (maybe 8 years ago) I noticed that the food was mediocre, the prices high, and the restaurant in general was sticky and filthy.

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.
Oct 14, 2011 3:44PM
avatar

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.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

YOUR RECENT NEWS SEARCHES

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by: