Bankrupt concepts, near the end of
Chapter 11, turn page to next phase
After spending nearly a year in Chapter 11 bankruptcy protection, Vicorp Restaurants Inc. has identified a
court-approved buyer for its system of more than 300 Bakers Square and Village Inn family-dining restaurants.
(Continued from page 8)
Vicorp will be Ouf’s fifth
restructuring in the industry, following his work with Grandy’s,
Souper Salad, Black Angus and
Constellation Brands. He echoed
Mountford’s sentiments that an
organization’s people are the driving force behind successfully
completing a bankruptcy.
“A lot of people focus on the
financial restructuring, but you
can’t forget about the employees
and customers,” he said. “Your
ability to take care of the guest
will allow your operation to exit.”
Ouf said it could take three
years for a company to fully recover from a large bankruptcy. The
first year is typically a healing
process, the second year is about
executing the game plan, and the
third year is when returns start to
show, he explained.
Before companies can be fortunate enough to see returns,
however, a lot of work and financing is required. Given the weak
credit markets, securing financing is not so easy. Companies
should line up financing prior to
entering bankruptcy by communicating well ahead of time with
their banks and other lenders,
sources said.
Working in the restaurant
industry’s favor is the fact that
senior lenders want to keep
restaurants open to produce
cash, said Gene Baldwin, a partner at restructuring advisor
CRG Partners Group LLC.
Unlike in retail, where liquidation may be a favored option
because lenders calculate the
value of inventories that can be
sold, restaurants are valued on
the basis of their cash flow,
TARGET:
ACQUIRER:
SELLER:
ACTION:
COMMENTS:
Pizza Hut ( 40 locations)
JEM Restaurant Group of Charleston, S.C.
Kurani Pizza Inc. of Atlanta
Acquisition closed, terms undisclosed
JEM is a 100-unit franchisee of Taco Bells and
Pizza Huts. Jerry Bus, a former COO at Pizza Hut, will
operate the units, which are located in Columbus and
Macon, Ga., and in Jacksonville, Fla., under
subsidiary Southeastern Pizza Group LLC.
which only exists when a company is up and running.
CRG Partners, which focuses
on corporate turnarounds, bank-ruptcies and financial advice, has
worked with numerous restaurant
clients. One of CRG’s partners,
Lisa Poulin, currently is the chief
restructuring officer at Black
Angus Steakhouse parent ARG
Enterprises Inc., which filed for
bankruptcy last month. Sources
have said ARG will use its
Chapter 11 to conduct a sale to
new owners.
Baldwin predicted that for the
dozens of restaurants that file for
Chapter 11, there would be
dozens more that choose to
undertake a restructuring outside of the court system. The
largest pitfalls to avoid in either
scenario, he said, include going
into a restructuring without an
exit plan that all parties — management, shareholders and
lenders — have agreed to, getting
hung up in fights with creditors,
and not having enough money to
make it through.
When executed correctly, a
restructuring can bring a company back from the brink.
“It lets you get back to the core
business that makes money,”
Baldwin said. “You get through it,
you maximize the profits … and you
have a better company for it.” ■
slockyer@nrn.com
Need to track restaurant stocks in real time, download industry data, and
follow the market? Go to NRN Market Monitor at http://finance.nrn.com
SAME-STORE SALES TRENDS
PERIOD,
END DATE
YEAR AGO
% CHG. CHG.
SYS TEMWIDE UNLESS NOTED; NEW RESULTS IN BOLDFACE
QUICK SERVICE
Arby’s(corporate) Q3,9/28 - 7. 2 -1.0
Burger King, Global Q2, 12/31 2.9 4. 5
Burger King, U.S. & Canada Q2, 12/31 1.9 4. 2
CKE: Carl’s Jr. (corporate) 4 wks., 1/26 -0.2 -1.3
Hardee’s (corporate) 4 wks., 1/26 0.7 -1.8
Jack in the Box (corporate) Q4, 9/28 -0.8 5. 2
McDonald’s, Global 4 wks., 12/31 5. 8 5. 3
McDonald’s, U.S. 4 wks., 12/31 5.0 0.0
McDonald’s, Europe 4 wks., 12/31 5. 4 7. 7
McDonald’s, Asia-Pacific/Middle East/Africa 4 wks., 12/31 5. 7 12. 6
Popeyes Chicken & Biscuits, Global Q3, 10/5 -1.9 -1.7
Popeyes Chicken & Biscuits, U.S. Q3, 10/5 - 2. 8 -1.9
Sonic Q1, 11/30 - 3. 6 2.1
Wendy’s (corporate) Q3, 9/28 -0.2 0.2
Wendy’s(franchised) Q3,9/28 0.2 1.3
Yum! Brands, blended chains, Global Q4, 12/27 3.0 4.0
Yum! Brands, blended chains, U.S. Q4, 12/27 2.0 1.0
Yum! Brands, blended chains, China Q4, 12/31 1.0 17.0
Yum! Brands, blended chains, International Q4, 12/1 5.0 5.0
CASUAL DINING
Applebee’s Neighborhood Grill & Bar, U.S. Q3, 9/30
Benihana: Benihana teppanyaki Q3, 1/4
Haru Q3, 1/4
RA Sushi Q3, 1/4
BJ’s Restaurants, blended chains (corporate) Q3, 9/30
Brinker: Chili’s Grill & Bar (corporate) Q2, 12/28
Maggiano’s Little Italy (corporate) Q2, 12/28
On the Border (corporate) Q2, 12/28
Macaroni Grill (corporate) Q2, 12/28
Buffalo Wild Wings (corporate) Q3, 9/28
Buffalo Wild Wings (franchised) Q3, 9/28
California Pizza Kitchen (corporate) Q4, 12/28
The Cheesecake Factory: The Cheesecake Factory Q3, 9/30
Grand Lux Café Q3, 9/30
Darden: Bahama Breeze Q2, 11/23
The Capital Grille Q2, 11/23
LongHorn Steakhouse Q2, 11/23
Olive Garden Q2, 11/23
Red Lobster Q2, 11/23
Famous Dave’s (franchised) Q3, 9/28
Granite City Food and Brewery Q3, 9/30
Grill Concepts, blended chains Q3, 9/28
J. Alexander’s Q3, 9/28
Kona Grill Q3, 9/30
Landry’s, various brands Q3, 9/30
McCormick & Schmick’s Seafood Restaurants Q3, 9/27
Mexican Restaurants (corporate) Q3, 9/28
Mexican Restaurants (franchised) Q3, 9/28
Mimi’s Café Q3, 1/23
Morton’s Q3, 9/28
O’Charley’s: O’Charley’s (corporate) Q4, 12/28
Ninety-Nine Restaurant & Pub (corporate) Q4, 12/28
Stoney River Legendary Steaks (corporate) Q4, 12/28
P.F. Chang’s China Bistro Q3, 9/28
Red Robin Gourmet Burgers (corporate) Q3, 10/5
Red Robin Gourmet Burgers (franchised), U.S. Q3, 10/5
Ruby Tuesday (corporate) Q2, 12/2
Ruby Tuesday (franchised) Q2, 12/2
Ruth’s Chris Steak House (corporate) Q3, 9/28
Ruth’s Chris Steak House (franchised) Q3, 9/28
Texas Roadhouse (corporate) Q3, 9/23
Texas Roadhouse (franchised) Q3, 9/23
FAST-CASUAL
Chipotle Mexican Grill Q3, 9/30 3.1 12. 4
Cosi Q4, 12/29 - 6.9 2.1
Einstein Noah, blended chains (corporate) Q3, 9/30 -1.7 5. 2
Panera Q39/25 3. 3 2. 6
Pei Wei Asian Diner Q3, 9/28 - 2.9 -1.0
Qdoba Mexican Grill Q4, 9/28 -1.0 5. 8
Rubio’s Q3, 9/28 - 2.1 7.1
PIZZA
Chuck E. Cheese’s (corporate) Q3, 9/28 1.1 - 2. 5
Domino’s Pizza, U.S. Q3, 9/7 - 6.1 -1.6
Domino’s Pizza, International Q3, 9/7 5. 4 8. 3
Papa John’s Pizza, U.S. Q3, 9/28 1.7 0.2
Pizza Inn, U.S. Q1, 9/28 1.1 3. 4
COFFEE and SNACK
Caribou Coffee (corporate) Q3, 9/28 - 4. 7 1.0
Jamba Juice (corporate) Q3, 10/7 - 10. 3 3. 8
Krispy Kreme Doughnuts Q3, 11/3 -1.3 - 2.9
Starbucks Coffee, U.S. Q1, 12/28 - 10.0 -1.0
Tim Hortons, U.S. Q3, 9/28 -0.6 4. 5
Tim Hortons, Canada Q3, 9/28 3. 8 7. 7
FAMILY-DINING and BUFFET
Bob Evans Restaurants -1.3 1.5
Cracker Barrel Old Country Store - 3. 2 1.8
Denny’s (corporate) - 3. 2 -1.2
Denny’s (franchised) - 7. 2 0.3
Frisch’s Big Boy (corporate) 0.2 1.2
Golden Corral (units franchised by Frisch’s) 1.2 - 2. 8
IHOP 0.2 2.0
Luby’s 6. 7 - 3. 4
Steak n Shake (corporate) -1.4 -9.5
- 3.1
- 10.9
- 14. 6
-9.1
-1.0
- 4. 2
- 6.9
- 3. 7
- 10. 6
6. 8
2.1
- 7. 2
- 4. 7
- 5.1
- 8.0
- 8. 7
- 5. 7
0.8
0.3
- 4. 6
- 3. 3
- 8.0
- 7.9
- 10. 3
- 2.0*
- 5. 5
1.4*
- 3.9
- 6. 8
- 7. 6
- 6.1
- 8. 4
- 18. 2
- 3.1
- 2. 2
- 2.9
- 10. 8
- 6. 2
- 6.9
- 7.1
- 3. 2
- 4. 5
-0.3
2. 7
0.2
- 3. 6
5. 6
- 2. 4
1.7
- 4. 3
- 4.0
8. 3
5.9
1.8
1.0
4. 8
0.1
1.2
- 3.9
3. 2
0.1
- 3. 5
2. 7
9.1
1.3
4.9
1.0
-0.1
1.8
5. 4
- 2.0
7. 3
- 4. 3
- 2. 6
- 4. 5
-1.6
4. 8
2. 4
- 10. 8
- 8. 7
-0.4
-0.5
2. 5
2.0
Q3, 1/23
Q1, 10/31
Q4, 12/31
Q4, 12/31
Q1, 9/23
Q1, 9/23
Q3, 9/30
Q1, 11/19
Q1, 12/17
* COMPANY REPORTS EXCLUDED IMPACT FROM HURRICANES
