buckguy wrote: ↑April 23rd, 2024, 7:02 am
Chili's and Fridays have been closing stores for years and just announced a new round of closings. Applebee's continues to close stores and seems destined to become a mostly small market operation, at best. Denny's has had several rounds of closures---I think they benefited, over time, by the decline and, in some cases, ultimate disappearance of regional competition like Shoney's and the Big Boy franchises, as well as the problems IHOP has had. Red Lobster has been hurt by rising seafood prices, but pizza ovens weren't going to save them.
That's my point--Chili's and TGI Friday's were once trendy, hot chains, but they aren't anymore. You can hand-wring about private equity firms but Darden saw the writing on the wall and made the decision to drop it, even if it was still a controversial decision at the time.
Casual chains in general have been in decline since the Great Recession. The decline is largely blamed on rising costs and the shrinking middle class. These chains are still very relevant though - Chili’s still has over 1,200 locations - down 400 from its peak.
Darden didn’t want to give up Red Lobster - investors pressured it into doing so. The debt from the transaction had a lot to do with the financial woes.
I keep looking at ten year old articles and it all depends on which activist firm you read quoted. They were heavily criticized for giving up Red Lobster by many of the firms. Some were fine but said it sold too cheap and was worth billions more especially in their real estate as many restaurants were owned sites. Others were happy they sold it off. That's the only reason I bring it up because there wasn't a clear, compelling argument for keeping it or selling it. Their future story had not been written yet and I think Darden would have figured out how to enhance it with more grilled vs fried or whatever if they had kept it. Instead it went to Golden Gate to be buried. No matter what, this negative outcome makes Darden look good.
Chili's I only recently learned has franchised out about 40% of their locations. I have a sneaky suspicion that they sell off their lesser performing units hoping that maybe an independent operator can rescue them. That may help explain some of the closures, although many I think are location problems and weren't necessarily Chili's problems. They have a unusual model for casual dining, lower prices which mean lower margins and necessitate high volume. Shorter hours than Applebee's and others. So if the location deteriorates they have to close and fast. A couple in South OC closed recently and landlords were roundly being blamed in comment sections by those who don't understand how leases work, but then the truth came out in employees commenting about the franchisee and their problems. I really thought they were company locations but apparently not.
I think the 40% franchisee Chilis is dated information.
They spent a lot of time the past ~10 years buying out franchisees and converting back to corporate stores. They did this even during COVID. I think they did this for a lot of the reasons you bring up such as pricing consistently and also for them a big thing has been the ghost kitchen thing. But franchisees don't always get on board with these types of ideas.
I had heard a year or so ago they were down to less than 100 franchised units in the US. I assumed most of those were the airports Too units.
storewanderer wrote: ↑April 23rd, 2024, 12:22 pm
I think the 40% franchisee Chilis is dated information.
They spent a lot of time the past ~10 years buying out franchisees and converting back to corporate stores. They did this even during COVID. I think they did this for a lot of the reasons you bring up such as pricing consistently and also for them a big thing has been the ghost kitchen thing. But franchisees don't always get on board with these types of ideas.
I had heard a year or so ago they were down to less than 100 franchised units in the US. I assumed most of those were the airports Too units.
I had linked and now removed an article. They are most recently 29% franchised, however that is a misleading figure as most of the franchises are international. (I didn't realize that they were so big outside of the US). They are at 101 franchise restaurants currently in the US, and 359 international franchise locations.
Chili's closed both the Irvine and Aliso Viejo locations recently. Both locations were always super busy with waits on weekends. Both were featuring trial menus in which the "3 For Me" was priced at $16.99 and above. I suspect the rents swelled so they closed up shop... I think it's difficult for many legacy chains to compete in this real estate environment.
In the early 2010s,
- My favorite entrée was $10.99 at Red Lobster. Today, it's $27.99. Coupons for $5 off two entrees were common then, non-existent today.
- We use to go to Sizzler -- a 6 oz. steak and baked potatoes was $5 with coupon. Today it's $21.99.
- A sizzling fajita was $14.99 at El Torito. Now $30.99.
- 6 oz. sirloin with two sides and soup or salad was $11.99 at Outback. Now $20.99 with one side. Coupons were plentiful -- free appetizer, $5 off, etc. but non-existent.
- A value slam was $4 at Denny's. Biscuits and gravy $2. Today the cheapest thing on the menu is $12+ (some locations do have a value slam for $7, but not locally).
Prices going up due to swelling rents, etc. but middle class shrinking = fewer chains.
Bagels wrote: ↑April 23rd, 2024, 3:08 pm
Chili's closed both the Irvine and Aliso Viejo locations recently. Both locations were always super busy with waits on weekends. Both were featuring trial menus in which the "3 For Me" was priced at $16.99 and above. I suspect the rents swelled so they closed up shop... I think it's difficult for many legacy chains to compete in this real estate environment.
In the early 2010s,
- My favorite entrée was $10.99 at Red Lobster. Today, it's $27.99. Coupons for $5 off two entrees were common then, non-existent today.
- We use to go to Sizzler -- a 6 oz. steak and baked potatoes was $5 with coupon. Today it's $21.99.
- A sizzling fajita was $14.99 at El Torito. Now $30.99.
- 6 oz. sirloin with two sides and soup or salad was $11.99 at Outback. Now $20.99 with one side. Coupons were plentiful -- free appetizer, $5 off, etc. but non-existent.
- A value slam was $4 at Denny's. Biscuits and gravy $2. Today the cheapest thing on the menu is $12+ (some locations do have a value slam for $7, but not locally).
Prices going up due to swelling rents, etc. but middle class shrinking = fewer chains.
The landlords are pushing up rents to insane amounts looking to create a lack of demand to further justify converting these spaces to residential especially in Orange County. We still have $10.99 3 for Me in Temecula, Murrieta etc. because rents are reasonable and they're packed every night.
Also some of these chains have wacky pricing that is not justified. Sizzler is a perfect example. Bad food and insane prices even here, a small 14 oz ribeye is $40.69. Meanwhile we have Texas Roadhouse 10 minutes up the freeway serving a massive 20 oz (minimum, usually larger in my experience) bone-in ribeye properly prepared over flame and two made from scratch sides for $35.99, and that's after two price increases in the last year. Sizzler looks ready to close up shop (the dead small format Amazon Fresh next door sure isn't bringing them any traffic), while Texas Roadhouse is building another location in Temecula and had to rent multiple outside refrigerated storage units because they're so busy they can't fit a days worth of food in their walk-ins. Difference is just a few dollars but the value is massive.
Bagels wrote: ↑April 23rd, 2024, 3:08 pm
Chili's closed both the Irvine and Aliso Viejo locations recently. Both locations were always super busy with waits on weekends. Both were featuring trial menus in which the "3 For Me" was priced at $16.99 and above. I suspect the rents swelled so they closed up shop... I think it's difficult for many legacy chains to compete in this real estate environment.
In the early 2010s,
- My favorite entrée was $10.99 at Red Lobster. Today, it's $27.99. Coupons for $5 off two entrees were common then, non-existent today.
- We use to go to Sizzler -- a 6 oz. steak and baked potatoes was $5 with coupon. Today it's $21.99.
- A sizzling fajita was $14.99 at El Torito. Now $30.99.
- 6 oz. sirloin with two sides and soup or salad was $11.99 at Outback. Now $20.99 with one side. Coupons were plentiful -- free appetizer, $5 off, etc. but non-existent.
- A value slam was $4 at Denny's. Biscuits and gravy $2. Today the cheapest thing on the menu is $12+ (some locations do have a value slam for $7, but not locally).
Prices going up due to swelling rents, etc. but middle class shrinking = fewer chains.
The landlords are pushing up rents to insane amounts looking to create a lack of demand to further justify converting these spaces to residential especially in Orange County. We still have $10.99 3 for Me in Temecula, Murrieta etc. because rents are reasonable and they're packed every night.
Also some of these chains have wacky pricing that is not justified. Sizzler is a perfect example. Bad food and insane prices even here, a small 14 oz ribeye is $40.69. Meanwhile we have Texas Roadhouse 10 minutes up the freeway serving a massive 20 oz (minimum, usually larger in my experience) bone-in ribeye properly prepared over flame and two made from scratch sides for $35.99, and that's after two price increases in the last year. Sizzler looks ready to close up shop (the dead small format Amazon Fresh next door sure isn't bringing them any traffic), while Texas Roadhouse is building another location in Temecula and had to rent multiple outside refrigerated storage units because they're so busy they can't fit a days worth of food in their walk-ins. Difference is just a few dollars but the value is massive.
That Sizzler must be one of the BMW Management units. The corporate Sizzler in Sacramento on Madison has that item 14oz Ribeye priced at 25.99. There is a BMW Management Sizzler also in Sacramento on Advantage Way and it has that item 14oz Ribeye priced at 40.69.
BMW is the largest franchisee and I don't know how they can survive with this type of pricing. Especially in some of the locations they have. Yuba City and 40.69 for 14oz Ribeye? Unreal.
There aren't many corporate Sizzlers left unfortunately. Their pricing was always more realistic. But it used to be you know like $2 two dollars cheaper per item and the corporate units would heavily push 5.99 lunch specials etc... but this thing with the Ribeye $14.70 cheaper is pretty unreal.
If a chain is in long-term decline, then rising rents will give them more reason to keep closing stores. I'm surprised when I see any of these places that have been named, because they've gotten fewer and fewer. International operations probably keep some of them afloat--chains like Shkey's and Kenny Rogers couldn't have lasted even in their diminished form without them.
Diluting Red Lobster's brand with pizza makes no sense particular as both the quick serve pizza (Mod, &pizza, etc.) and the brick oven Neopolitan style fads seem to be passing.
Fast food and fast casual restaurants realized they didn't need promotions during COVID and could raise prices, and they've kept doing it, out of whack with the inflation in their costs. This can only last so long and the most vulnerable chains will continue to lose ground. If you live in a place with lots of good take out or simple eat-in restaurants, then there's no point in bothering with these places and there are more alternatives in many cities, not just ones always known for cosmopolitan choices.
buckguy wrote: ↑April 24th, 2024, 5:30 am
If a chain is in long-term decline, then rising rents will give them more reason to keep closing stores. I'm surprised when I see any of these places that have been named, because they've gotten fewer and fewer. International operations probably keep some of them afloat--chains like Shkey's and Kenny Rogers couldn't have lasted even in their diminished form without them.
Diluting Red Lobster's brand with pizza makes no sense particular as both the quick serve pizza (Mod, &pizza, etc.) and the brick oven Neopolitan style fads seem to be passing.
Fast food and fast casual restaurants realized they didn't need promotions during COVID and could raise prices, and they've kept doing it, out of whack with the inflation in their costs. This can only last so long and the most vulnerable chains will continue to lose ground. If you live in a place with lots of good take out or simple eat-in restaurants, then there's no point in bothering with these places and there are more alternatives in many cities, not just ones always known for cosmopolitan choices.
Well said, and in my area it plays out just like that.
buckguy wrote: ↑April 24th, 2024, 5:30 am
If a chain is in long-term decline, then rising rents will give them more reason to keep closing stores. I'm surprised when I see any of these places that have been named, because they've gotten fewer and fewer. International operations probably keep some of them afloat--chains like Shkey's and Kenny Rogers couldn't have lasted even in their diminished form without them.
Diluting Red Lobster's brand with pizza makes no sense particular as both the quick serve pizza (Mod, &pizza, etc.) and the brick oven Neopolitan style fads seem to be passing.
Fast food and fast casual restaurants realized they didn't need promotions during COVID and could raise prices, and they've kept doing it, out of whack with the inflation in their costs. This can only last so long and the most vulnerable chains will continue to lose ground. If you live in a place with lots of good take out or simple eat-in restaurants, then there's no point in bothering with these places and there are more alternatives in many cities, not just ones always known for cosmopolitan choices.
Well said, and in my area it plays out just like that.
I'm starting to see more promotions creep into fast food and casual food as of late. I have noticed outside of the never ending lines at In-N-Out there is a definite slowdown in traffic at other fast food places and fast casual. I am surprised how many emails and app notifications I'm seeing in the last week or so, and I even saw a news story on TV last night that restaurants are starting to put together more deals. I think this latest wave of price increases that hit over the past few months is really turning off customers who are very much pinched for cash right now. I suspect that more of these promotions will be targeted to customers on social media or who will use mobile ordering and such to cut labor cost for the most part.
For example, I am a hockey fan and Chipotle snuck in a last minute BOGO deal Monday on social media for anyone who wears any hockey jersey to their restaurant. No upper limit, you could theoretically order ten burritos or bowls and pay for five. Interestingly enough, it was not in partnership with the NHL although they usually sponsor many teams. The lack of NHL inclusion indicates that it was thrown together last minute as any deal with the league takes months to set up, and it would have likely been better promoted with the playoffs just starting. It has been a while since I visited my nearest Chipotle and I was shocked to be the only person in line at prime time 5:30pm, last few visits at same time there was about a dozen people in line.
I seem to recall that Chili's completely exited Washington around 2008 (there may have been a location at Sea-Tac airport which hung on for a couple more years after that, but that's long gone now as well.) There was one near my employer at the time and I would occasionally end up there for team lunches or similar things, but I have not been to a Chili's since then. I think TGI Friday's didn't last much longer than that. Denny's has been shrinking in the Seattle area for years now as well (I know of at least five locations that closed in the past ten years, and most were probably cases where they could get far more money selling the land than operating the restaurant.)
For comparison, I compared prices of some steak entrees at the local chain places. Here's what I found:
TL;DR version: Texas Roadhouse has everyone beat on price in pretty much every instance when it comes to steaks. TGI Friday's is smoking something.
(All of these are with two sides. I tried to add Smokey Bones (a regional chain in the Southeast) but online ordering was unavailable on their website and I could only find prices with the added Grubhub delivery markup. Costco frequently sells discounted gift cards for Smokey Bones though, so the actual prices can be lower. I also found prices for the local Ruth's Chris Steakhouse, but that's the type of place you usually only go to on someone else's expense account, so I didn't include any of those.
5 ounce sirloin:
Waffle House: $11.50 (Steak and Eggs breakfast with hashbrowns and toast, this barely counts but I'll throw it in as a cheap option for a steak)
6 ounce sirloin:
Texas Roadhouse: $12.99 (I believe this is also on the "Early Dine" menu so it may be even cheaper if you dine in before 5pm on weekdays)
Longhorn Steakhouse: $14.79
Logan's Roadhouse: $15.49
Chilis: $15.59
Applebee's: $15.99
Outback: $15.99
Cracker Barrel: $15.99 (Weight not specified. There is also a "Sirloin Steak Sampler" on the menu for $17.49 which also includes either grilled/fried chicken tenders or fried shrimp.)
