Restaurant Chains Making A Comeback After Going Broke

The rise and decline of restaurant chains is not uncommon in the business world. While some businesses fail due to financial difficulties, others are able to stage a remarkable comeback.

These comeback examples are evidence of the restaurant industry’s resilience and adaptability. Despite significant setbacks, these chains find inventive ways to reinvent themselves and recapture customers’ affections and appetites.

These once-struggling brands have regained vitality and profitability through strategic reorganization, menu revisions, enhanced marketing efforts, and operational enhancements.

Their ability to learn from prior errors, analyze market trends, and adapt to changing consumer preferences is crucial to their revival.

As they reclaim their position in the competitive landscape, these revitalized restaurant franchises demonstrate how a setback can be transformed into an opportunity, instilling optimism in both business owners and customers.

For a satisfying meal that won’t break the bank, look no further than Golden Corral menu prices.

California Pizza Kitchen

California Pizza Kitchen was among the chains hardest affected by COVID-19. In an instant, dine-in sales plummeted by nearly 80%, forcing the company to shutter the roughly 50 locations that did not offer off-site dining.

California Pizza Kitchen filed for Chapter 11 bankruptcy just a few months later. The owners attempted to sell but received no qualified proposals. Instead, they focused on eliminating their $400 million in debt.

In November, California Pizza Kitchen emerged from bankruptcy with $220 million less in debt, eager to turn things around.

To promote its revitalization, the brand prioritized menu innovation, technology investments, and expansion of its off-premises business. The modifications enabled sales return to pre-COVID levels the following year.

Now, expansion is one of the organization’s top priorities. California Pizza Kitchen announced the launch of its first-ever domestic franchise program in December 2021.

Giorgio Minardi, the brand’s executive vice president of global development & franchise operations, said in a statement, “For the first time in our 35-year history, we’re eager to engage new domestic franchisee partners who share our passion for creating unforgettable dining experiences and expanding our reach to bring CPK to even more diners nationwide.

” The organization is also interested in expanding its global scope. California Pizza Kitchen announced plans to open additional locations in Costa Rica and Chile in March 2022, bringing its total number of international restaurants to approximately 50.

Golden Corral

During the COVID-19 pandemic, all types of restaurants encountered difficulties, from fast-food outlets to fine-dining establishments.

Buffet-style restaurants, such as Golden Corral, had a particularly difficult time regaining business, even after restaurants were permitted to reopen. The decline in business caused the two main franchisees of the chain to declare bankruptcy.

“Early on, there were some dark days,” Golden Corral CEO Lance Trenary told FSR Magazine. “We anticipated that our segments, and our company in particular, would be under tremendous pressure.”

Golden Corral was required to develop novel food delivery methods. Various methods, including cafeteria-style dining and “buffet-to-your-table” service, were implemented.

In addition to adding drive-thru and delivery options, Golden Corral created its first virtual brand, Homeward. Trenary stated, “Anything we can do to essentially scream that Golden Corral is not just for finding an experience, we have all these other options, we will do.

” Therefore, we’re putting a lot of effort into expanding that aspect of our business, and we believe it will be a permanent endeavor.

By the summer of 2022, same-store sales at Golden Corral had increased by 3 to 5 percent from 2019. Trenary received the prestigious Gold Plate Award from the International Foodservice Manufacturers Association due to its remarkable reversal.

In a press release, he stated, “The past two years have been so difficult.” “The fact that we have experienced a turnaround is everything.”

Friendly’s

Friendly’s was founded in 1935 during the Great Depression, so it is familiar with enduring difficult circumstances. In recent years, the chain required every ounce of this resolve. In less than a decade, Friendly’s has declared for bankruptcy twice: first in 2011 and then again in 2020.

From the outside, these economic downturns could be viewed as anomalies caused by the Great Depression and, respectively, the COVID-19 pandemic. In reality, Friendly’s has been in a financial decline for the majority of this century.

Example: The company was sold for more than $337 million in 2007. In 2020, when new ownership acquired the chain, they did so for less than $2 million.

But things are finally looking up for Friendly’s, due in large part to its new owner, Acmi Partners Group, which has given the once-struggling restaurant chain a new lease on life.

New management initiated the revitalization process by altering the menu. Early in 2021, Friendly’s reinstated an all-star lineup of menu items and instituted a quarterly ice cream flavor rotation. In addition, a new loyalty program was introduced.

However, the brand is not simply adhering to what has worked in the past. As with all restaurant chains, it had to reinvent itself.

This is exemplified by Friendly’s Café, a novel fast-casual concept introduced by the company in 2022. Additionally, Friendly’s began implementing ghost kitchens and virtual brands into its restaurants.

Dave & Buster’s

Three short years ago, it appeared that Dave & Buster’s was doomed, and the message wasn’t encouraging.

The eater-entertainment chain announced intentions to lay off 1,300 employees in the COVID-19 summer of 2020. Soon after, the company issued a warning that bankruptcy could be imminent.

Nevertheless, Dave & Buster’s had a greater future than most anticipated. After avoiding bankruptcy, the chain regrouped and developed a new business strategy. This included the acquisition of exclusive amusement games, the development of new food and beverage menus, the addition of in-store technological features, and the provision of third-party delivery.

For its mature clientele, the chain hired nationally renowned DJs to perform during happy hour and collaborated with the UFC and WWE to broadcast their events. “There are so many opportunities here that are obviously things that we could do that any newcomer would think, ‘Wow, that makes sense.

That makes perfect logic,'” Dave & Buster’s interim CEO Kevin Sheehan said during a conference call, according to FSR Magazine. “Thus, we’re focusing on all of these, while also being mindful not to detract from the fantastic opportunity presented by a new employee.”

The moves were as successful as Dave & Buster’s could have imagined, if not more so. Dave & Buster’s revenue for the first quarter of 2022 was a record-breaking $451,1 million. In 2019, during the same time period, the brand recorded sales of $363,6 million.

Steak and Ale

The storied history of Steak and Ale extends back to the 1960s. Positioning itself as an elegant steakhouse with affordable prices, the brand was instrumental in establishing casual dining.

All of this ended in July 2008, when the company filed for bankruptcy. Steak and Ale promptly closed all of its 58 restaurants, unlike many other chains that continue to operate during bankruptcy proceedings.

Seven years passed before Paul and Gwen Mangiamele revived the brand. Through their company, Legendary Restaurant Brands, the husband and wife acquired the brand, recipes, and intellectual property of the restaurant chain.

This marked the beginning of an eight-year effort to reopen Steak and Ale. Paul Mangiamele stated to Restaurant Business Online, “You must be very disciplined, especially as a franchisor.”

“It’s been very slow but very deliberate and, hopefully, quite intelligent.” In January 2024, Legendary Restaurant Brands and franchise operator Endeavor Properties reached an agreement for the development of 15 restaurants. The first location is scheduled to open in the Minneapolis suburbs later this year.

Future diners can anticipate a similar experience to that of the original Steak and Ale, but with notable distinctions. The restaurants will be smaller in scale but will offer a broader selection of food and beverages.

“People long for the days when they could have a memorable experience without spending a fortune,” Mangiamele said. “The evolution of the category of affordable steakhouses is ready for reintroduction.”

Bennigan’s

Bennigan’s was also affected when Steak and Ale’s parent company, S&A Restaurant Corp., declared bankruptcy in 2008.

In the twinkling of an eye, all 150 locations of the Irish-themed chain owned by the corporation were closed. Bennigan’s was left with only 15 restaurants after the closure of the majority of its approximately 130 franchised locations.

Similarly to Steak and Ale, however, Bennigan’s was saved by Legendary Restaurant Brands in 2015, which purchased the chain.

The brand opened additional restaurants in Steubenville, Ohio, Mandan, North Dakota, and Monhans, Texas, three years later. These off-the-beaten-path locations may seem less than optimal, but they were chosen as part of Bennigan’s strategy to concentrate on smaller markets.

Not only can Bennigan’s operate with lower operating costs in these cities, but the restaurants are also more popular. “If I open a Bennigan’s in Manhattan, it will be just another restaurant,” said Paul Mangiamele, CEO of Legendary Restaurant Brands. “You open in Monahans, Texas, and it’s the biggest event of the century.”

Early indicators suggest that the strategy is working. Despite being half the scale of traditional Bennigan’s restaurants, the three new restaurants were generating twice as much revenue.

“We have distilled 42 years of experience into a system that delivers proven results for the brand and resonates with the communities we serve,” stated Mangiamele (via RestaurantNews.com). Consequently, Bennigan’s is now thriving in lesser markets that so many national brands disregard.

Sweet Tomatoes

Similar to Steak and Ale, the casual-dining chain Sweet Tomatoes (or Souplantation in California) was not only bankrupt, but also out of business.

In 2020, the restaurant’s parent company, Garden Fresh Restaurants, filed for insolvency, closing all of its Sweet Tomatoes locations. It appears that the deceased chain has regained a pulse three years later.

CBRE announced in March that it had leased out a 7,000-square-foot building in Tucson, Arizona that formerly hosted a Sweet Tomatoes restaurant for more than two decades.

ST Three LLC, the new tenant, stated that it intended to revive the restaurant and had already acquired the brand’s intellectual property and employed former Sweet Tomatoes employees.

“[The tenant] indicated the concept [Sweet Tomatoes] had and continues to have a strong following with patrons still active on Facebook and Instagram sites,” CBRE’s Nancy McClure stated in a statement.

The real estate company reported that ST Three intended to open the restaurant in the coming months, but there was no word on whether it would feature the same buffet-style menu as Sweet Tomatoes.

There was also no mention of the possibility of future Sweet Tomatoes restaurants opening, much to the dismay of devotees. According to Restaurant Business Online, the Tucson location will serve as a test case for the revived brand.

CiCis Pizza

In 2009, CiCis Pizza possessed a staggering 600 locations. This number would ultimately represent the chain’s peak performance.

Over the following ten years, the pizza company’s footprint progressively diminished. By 2021, there were only 300 Cicis restaurants remaining. In the same year, the pizza chain declared bankruptcy due to a precipitous decline in business.

The company was saved by D&G Investors, a newly established investment firm that consented to purchase the brand out of bankruptcy.

In 2024, Cicis president Jeff Hetsel told Franchise Times, “We are doing well.” “We have really recovered from COVID. We were able to put together a fantastic team and plan, as well as find a great partner, despite the fact that the situation was initially somewhat bleak. We are beginning to gain headway.”

The new proprietors assisted in the enhancement of operations, recipes, and advertising. The most obvious distinction is also the toughest to overlook.

The game spaces in CiCis restaurants are now exponentially larger than those in conventional stores. “I just added $180,000 worth of games to my Fort Worth store, and my game sales have doubled,” said Hetsel. “It’s been unbelievable.”

These modifications have been beneficial for CiCis. Comparable-store sales increased 31% in 2022 compared to the previous year. The chain performed even better than it did in the final year before COVID in 2019.

The Lost Cajun

The Lost Cajun was founded in 2010 by Louisiana native Raymond Griffin in Frisco, Colorado. Residents of the Centennial State would wait in lines that extended around the building to sample its “exotic” cuisine.

Griffin began franchising a few years after its success. This is when things began to decline. Griffin acknowledges that the chain grew too rapidly for its own benefit. “Too rapid a growth rate is too rapid,” Griffin told FSR Magazine. “You can’t do it well.”

The Lost Cajun ultimately expanded to 25 stores in 2018, but in the same year it began closing restaurants. As a result of the pandemic, the chain was forced to declare bankruptcy in March 2021.

A few months later, the company emerged from bankruptcy with a new lease on life… and a new strategy. Griffin initially launched the restaurant to foster community and, as a result, delivery was not a focus.

Prior to COVID-19, off-site sales comprised less than 10% of total revenue. After learning how to maintain food quality during transport, delivery sales increased by approximately 35 percent.

There have been additional indications of the chain’s robust comeback. Even though it opened during the pandemic, the Canon City, Colorado location was an instant success. The chain subsequently expanded to California.

Griffin recalled the California franchisee of the store saying, “I will not be deterred.” “‘I will open a Lost Cajun because I am certain it will be wildly successful.’

Logan’s Roadhouse

In March 2020, the outlook for Logan’s Roadhouse was grim. CraftWorks Holdings filed for Chapter 11 bankruptcy with a proposal to sell its 261 company-owned restaurants after closing 37 underperforming stores.

However, the COVID-19 pandemic thwarted these plans, compelling CraftWorks to close these locations and lay off roughly 18,000 employees. CraftWorks was on the verge of filing for Chapter 7 bankruptcy, which would have required it to relinquish all assets and cease operations.

A few months later, a lifeline was thrown to the company. SPB Hospitality agreed in June to acquire CraftWorks’ restaurant portfolio, including Logan’s Roadhouse. Under new management, Logan’s rapidly returned to life. By July, 103 of the 113 locations of the chain had reopened.

The strategy of SPB centered on reducing the steakhouse’s menu, closing stores in underperforming markets, and boosting off-site sales. It has been more effective than most could have predicted. In 2021, the chain’s 136 locations generated $417 million in sales.

According to Restaurant Business Online, this represents a roughly $160 million increase from the prior year. Prior to the implementation of COVID in 2019, Logan’s generated $496 million with a footprint of 204 restaurants.

According to SPB CEO Marc Buehler’s statement to FSR Magazine, “We have a highly dedicated team of people who specifically focus on their concepts” in reference to Logan’s Roadhouse and its sibling chains.

They are enthusiastic about the challenges they face and where we can take these brands.

Smokey Bones

In 2007, parent company Darden closed 54 locations and sold the remaining stores due to declining business.

Under the new ownership, the brand continued to struggle, with consistently declining revenue from 2015 to 2018. When former Long John’s Silver and Sonic executive James O’Reilly took over as CEO in 2019, things ultimately began to improve.

Additionally, Smoky Bones retained the services of Doug Zeif, the original brand consultant. The new management redesigned the menu and launched two new virtual brands: Burger Experience and Wing Experience.

Since then, Smokey Bones has added two additional digital brands: the barbecue-focused Bowl Market and the chicken-focused Tender Box.

This new business has aided a restaurant chain that previously relied solely on brick-and-mortar establishments. Restaurant Business Online estimates that its 64 stores generated $125 million in revenue in 2020.

In spite of having three fewer restaurants the following year, sales increased to $186 million. O’Reilly told FSR Magazine, “We have been believers in our virtual restaurant business ever since they became a significant portion of our revenue stream.

” And over the past few years, we’ve learned how to perpetually optimize them and enhance the guest experience.

Chuck E. Cheese

Oh, how rapidly circumstances can shift! In 2019, Chuck E. Cheese’s revenue exceeded $900 million. The company filed for bankruptcy and temporarily closed 775 locations the following year.

“Unfortunately, we lacked the financial strength to survive the pandemic,” David McKillips, CEO of CEC Entertainment’s parent company, told the IAAPA.

However, the previous year’s success was a clear indication that demand was still strong. Chuck E. Cheese is one of the largest pizza companies in the world, but in contrast to other pizza chains, almost none of its revenue comes from delivery and takeout. Chuck E. Cheese simply required a novel method of customer outreach.

It did so by becoming one of the first national companies to introduce a new brand via phantom kitchens. Pasqually’s Pizza & Wings is a delivery-only business that operates out of Chuck E. Cheese facilities but offers a different pizza than the eater-entertainment establishment.

Chuck E. Cheese invested significantly in technology enhancements, such as the introduction of an e-ticket platform and the development of a new mobile application, so that customers could return to its restaurants during the pandemic in safety.

This development indicates an improved future for Chuck E. Cheese. “The brand has been able to reinvent itself over the decades,” says McKillips. “We’re prepared for the next generation of Chuck E. Cheese — for today’s children who seek entertainment in a slightly different manner.”

FAQs – Restaurant Chains Making A Comeback After Going Broke

Restaurant Chains Making A Comeback After Going Broke

Which restaurant chains have successfully made a comeback after going broke?

After experiencing financial difficulties, several restaurant chains have made successful a comeback. Chipotle Mexican Grill, Applebee’s, Buffalo Wild Wings, Domino’s Pizza, IHOP, Outback Steakhouse, Olive Garden, Red Lobster, TGI Fridays, and Subway are some notable examples.

How did these restaurant chains manage to make a comeback?

Various factors have contributed to the effective resurgence of these restaurant chains. They implemented strategic reorganization, redesigned their menus to accommodate shifting consumer preferences, enhanced their marketing strategies, and increased their operational efficiency. In addition, they focused on providing a high-quality culinary experience and fostering customer loyalty through innovative promotions, discounts, and initiatives.

Did these restaurant chains face any challenges during their comeback?

Yes, these restaurant chains faced significant obstacles on their road to recovery. Among the obstacles they had to surmount were restoring their reputation, regaining customer trust, and overcoming negative perceptions. In addition, they had to deal with operational issues, financial restructuring, and intense market competition.

How did these restaurant chains regain customer trust?

To regain customer confidence, these chains emphasized openness and responsibility. They implemented more stringent quality control measures, placed food safety as a top priority, and enhanced customer service. In addition, they actively engaged with their consumers via social media platforms, listened to their feedback, and promptly addressed their concerns.

What role did innovation play in the success of these restaurant chains?

Innovation was indispensable to the success of these restaurant chains. They implemented new menu items, incorporated technological advances to improve the ordering process, and utilized digital platforms for marketing and promotions. By anticipating trends and adjusting to shifting consumer demands, they remained competitive in the market.

Did these chains receive any external support during their comeback?

In some instances, restaurant chains received assistance from outside sources during their return. This support may include financial assistance from investors or private equity firms, partnerships with renowned chefs or personalities, and delivery service partnerships. These partnerships assisted these chains in generating buzz and attracting consumers.

How long did it take for these restaurant chains to bounce back?

The amount of time required for these restaurant chains to recover varied based on the particular circumstances and strategies employed. Others required more time to regain stability and profitability.

Are these restaurant chains currently thriving?

As of my knowledge termination date of September 2021, these restaurant chains were successful and expanding. It is essential to note, however, that the restaurant industry is dynamic and that their performance may have changed since then.

What lessons can other struggling restaurant chains learn from these successful comebacks?

These successful comebacks can provide valuable insights for struggling restaurant chains. Among these are the significance of adapting to shifting consumer preferences, focusing on quality and customer service, embracing innovation, and, when necessary, pursuing external support. For a successful revival, analyzing market trends, responding to customer feedback, and maintaining financial discipline are also essential.

Are there any risks associated with attempting a comeback after going broke?

Yes, attempting a comeback after bankruptcy involves risks. It requires cautious planning, reorganization of finances, and operational enhancements. Restoring a damaged reputation and regaining customer confidence can be difficult. In addition, market conditions, competition, and unanticipated events can influence the success of a comeback. However, it is possible to surmount these risks and achieve a successful turnaround with the proper strategies and resolve.

Conclusion

Remarkable tales of bankrupt restaurant chains making a revival demonstrate the industry’s resilience and adaptability.

Through strategic reorganization, menu revisions, increased marketing efforts, and operational enhancements, these chains have defied the odds and reclaimed their market position. They have embraced innovation and listened to consumer preferences in order to overcome obstacles such as reputation repair, regaining customer trust, and severe competition.

By anticipating trends and providing exceptional dining experiences, these chains have effectively transformed obstacles into opportunities. Their journeys serve as a model for struggling restaurant chains, emphasizing the importance of learning from errors, analyzing market trends, and placing customer satisfaction first.

A successful comeback is possible with meticulous planning, financial discipline, and determination, despite the risks involved. These revival tales instill optimism in the industry, demonstrating that restaurants can overcome adversity and capture the hearts and palates of customers.

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