There’s Lots of Bankrupt Restaurants

A lot of moderate-sized restaurant chains have filed for bankruptcy recently that were under our radar. And this Reuters article says that more are expected this year.

Last month the owner of the 69-unit Black Angus chain filed for Chapter 11 protection, while the Ponderosa and Bonanza chains filed late last year.

So moderately priced stakes are having a rough go, huh?

Here is a list of restaurants with distressed debt. None of these really surprise us a whole lot, with the exception of El Pollo Loco. We were under the impression that they, and other Latino-themed chicken chains were doing well. Silly us for assuming there are good stories out there!

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11 Responses to “There’s Lots of Bankrupt Restaurants”


  1. 1 Broker February 9, 2009 at 10:06 am

    Amazing – American women staying out of the malls AND learning how to cook? Who would have predicted this?

  2. 2 TheTerminator February 9, 2009 at 10:57 am

    To Broker: It is mind boggling, isn’t it? Next we’ll see American males actually earning their keep, instead of glossing over details with their “big picture” BS in corporate meetings.

  3. 3 Kafkaesque February 9, 2009 at 11:01 am

    You’re so correct Broker; the American woman shopper is doing just that. And even more interesting is the fact that that pyschographic is morphing into a status where “its actually cool to use coupons, shop less, buy at a huge discount, wait for the right price, do more with less, etc…” This is a huge shift in the paradigm that has already commenced and will play out over a number of years. Watch out Abercrombie,GAP, Nordies, Macy’s, even JCP…

    On the retailer front, most of the pain is being incurred by groups just like Ian mentions and certainly isn’t limited to restaurateurs. The total capitalization is big enough (but, in recent history WAS big enough) to leverage new units in an attempt to grow and reach economy of scale fixed lined item cost dilution on their P&L’s, but not big enough to do it without free cash flow large enough to feed the animal without a revolver or other form of liquidity when that process is underway as the free cash flow from actual sales dissapated through a contracting topline (i.e. the economy). I predict that ’09 will see a gargantuan amount of these BKs and a shuddering of stores and decrease in funds flow to Landlords through their would-be rentals and operating contributions; more than estimated by the self serving ICSC or the somewhat objective NRF.

  4. 4 James February 9, 2009 at 1:17 pm

    Let them eat cake!

  5. 5 don February 9, 2009 at 4:39 pm

    With that said, I am sure and cannot wait for the round of newbies that will spring up soon to take their place. One chicken nugget is another person’s gold nugget.

  6. 6 TheTerminator February 9, 2009 at 4:52 pm

    NOTHING ELSE WILL SPRING UP UNLESS THE BANKS OPEN UP THEIR WALLETS, AND THAT, MY FRIENDS, IS A VERY BIG IF.

  7. 7 NottoMentionUnprofitable February 9, 2009 at 4:58 pm

    Bankrupt, indeed, better not even mention the restaurants with half their portfolio sitting unprofitable. Ugly.

  8. 8 Dunkin'man February 9, 2009 at 5:35 pm

    Shuttering not “shuddering” although it’s a great synonym!
    ‘casue we all should be shudderin in our tracks!

  9. 9 Weed Removal February 9, 2009 at 8:53 pm

    …and the defunct out parcels clog-up the visibility of the struggling plazas behind.

  10. 10 chris hauser February 10, 2009 at 8:02 pm

    gonna be soem good deals in 2011-2012. but you better have cash and patience.

    gonna be some stuff that ain’t worth spit, too.

  11. 11 Brave New World March 22, 2009 at 3:52 pm

    The changes retail real estate is undergoing is cataclysmic. Better find other occupations. Soon, most will be out of work.


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