Some big, and not-so-big, parts of the restaurant industry’s history have been in the press lately.  A&W (probably my favorite restaurant as a child, back in the Paleolithic Era) has been sold -- again -- after experiencing little or no visible change or updating in the past decade or so; Friendly Ice Cream, which was restaurant of the town square for a couple of generations of small-town New England citizens, has filed Chapter 11 after a years-long struggle with aging facilities and changing demographics; Souper Salad, an early pioneer in the “healthier alternatives” buffets, has similarly entered bankruptcy after visibly tiring; and RealMex, a collection of Mexican food-themed brands assembled to become the first national-scale company in that genre, has joined them in bankruptcy protection, another victim of the high fixed costs imposed by a combination of high debt and lease expenses.

 

Each of these, and several other “heritage” brands in similar shape, are evidence that continued reinvestment is necessary to keep brands fresh and relevant, not only because of increasing competition, but because it’s essential to give the consumer reasons to keep visiting.  Sometimes that requirement for continued reinvestment is best executed by staying “true” to the brand’s heritage; at other times, it may mean a total reinvention of the brand -- a sort of voluntary destruction and replacement in order to stay relevant (or recapture relevance).

 

I’d be willing to bet that at least two of these entities have a good chance at a long future, once some of the past operating or capital mistakes are erased through bankruptcy.  We’ve all seen, by now, that it’s hard to kill brands once they become sufficiently established in the consumers’ mind.  [Witness the recent resurrection of the Bennigan’s brand.]  It’s not impossible, however, and I’d also be willing to bet that at least one of these companies will cease to exist in the next five years, whether because the owners and creditors are unwilling or unable to come to a capital structure resolution or because the brand’s been so damaged that it’s not worth the reinvestment cost to revive it.

 

Maybe it’s the beginning of the baseball postseason, but as I look at these companies, and some still-vibrant competitors, I’m reminded of Satchel Paige’s comment:  “Don’t look back.  Something might be gaining on you.”  (Thanks to the web site http://www.satchelpaige.com/quote2.html for confirmation)  It’s sound advice for people, and for businesses.  As we mourn Steve Jobs’ death, and marvel at the company he built, please notice that he set this example, never letting things rest, but constantly improving and replacing even when his customers didn’t seem to ask for such changes and his competitors weren’t pressing.  The reason to reinvest isn’t just because someone else did it; it’s because it’s like vitamins, or flossing, or exercise -- you might not notice at first if you skip it, and your customers might not notice either, but by the time you do notice, it’s a lot harder to recover.  And not all the reinvestment will work as planned; to use another Satchel Paige gem, “You win a few, you lose a few.  Some get rained out.”  But never forget the end of that wonderful epigram ... “But you gotta dress for all of them.”


Views: 26

Tags: bankruptcy, reinvestment

Comment

You need to be a member of FohBoh to add comments!

Join FohBoh

Comment by Sarah on October 17, 2011 at 11:46am
Great insights. Always look forward! Thanks Rod!

Non-Operator
Comment by Paul Letendre on October 13, 2011 at 3:56pm
Great stuff Rod, -Thanks

Advertisments

 

DEPARTMENTS

Social Wine Club for Craft Wineries

Smartbrief

Red Lobster crafts new, high-end image

Red Lobster will nix low-price specials and focus on flourishes like plating in order to reshape itself as a cut above dine-i -More

The Year of the Instagram Strategy
Managing the Instagram channel has become a strategic imperative for any brand or small business, and the urgency grows daily along with its user base. During this webinar on August 12 you'll hear how brands such as Disneyland Resort, JCPenney, and The Coffee Bean & Tea Leaf are utilizing this platform to connect with their customers in an authentic, relevant way. Register today!

The tweet's the thing

Everyone’s atwitter about the NRA's Kids LiveWell Twitter party, held in celebration of the program’s third anniv -More

Arby's meaty campaign highlights protein lineup

Arby's new campaign, "We have the meats!," focuses on the chain's new limited-time menu offering, the Mega Meat Stack, which  -More

JOBS & CAREERS

Posting a job or finding a job starts here at FohBoh. Call us about special $50 posting packages to syndicate across all major jobs boards.

National News

Ruby Tuesday Reports Fourth Quarter and Fiscal 2014 Results

Total revenue from continuing operations of $307.3 million compared to $316.1 million in the same quarter of the prior year, a decrease of $8.8 million primarily due to a net reduction of 36 Company-owned restaurants during the year.

DineEquity, Inc. Reports Successful Second Quarter 2014 Results

Second quarter 2014 adjusted EPS (Non-GAAP) of $1.16 and GAAP EPS of $1.00 - Adjusted EPS (Non-GAAP) increased 14% compared to the second quarter of 2013

Restaurant Trends - Growing And Emerging Concepts - Change and Activity July 29, 2014

Update from Restaurantchains.net on growing and emerging restaurant concepts

Gen Z, the First True Digital Generation, Represents the Future Foodservice Consumer

Gen Z, the first true digital generation, represents the future foodservice consumer. They're a generation on the move that strongly prioritizes speed of service, technology, and having what they want, when they want it. Millennials, more so than older generations, prefer to visit restaurants that offer new and unique foods and flavors. Gen X and Boomers converge on several preferences—such as the importance of a convenient location.

Red Robin Gourmet Burgers Celebrates Its 500th New Restaurant Opening

Red Robin's 500th new restaurant opening will open on Aug. 4 at 11 a.m., in Milpitas, Calif. at the Great Mall of the Bay Area.

CROWD FUNDING

If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.

TED TALKS VIDEO

TED: Ze Frank: Are you human? - Ze Frank (2014)

Have you ever wondered: Am I a human being? Ze Frank suggests a series of simple questions that will determine this. Please relax and follow the prompts. Let's begin …

TED: Heather Barnett: What humans can learn from semi-intelligent slime - Heather Barnett (2014)

Inspired by biological design and self-organizing systems, artist Heather Barnett co-creates with physarum polycephalum, a eukaryotic microorganism that lives in cool, moist areas. What can people learn from the semi-intelligent slime mold? Watch this talk to find out.

TED: Shih Chieh Huang: Sculptures that’d be at home in the deep sea - Shih Chieh Huang (2014)

When he was young, artist Shih Chieh Huang loved taking toys apart and perusing the aisles of night markets in Taiwan for unexpected objects. Today, this TED Fellow creates madcap sculptures that seem to have a life of their own—with eyes that blink, tentacles that unfurl and parts that light up like bioluminescent sea creatures.

TED: Nikolai Begg: A tool to fix one of the most dangerous moments in surgery - Nikolai Begg (2013)

Surgeons are required every day to puncture human skin before procedures — with the risk of damaging what's on the other side. In a fascinating talk, find out how mechanical engineer Nikolai Begg is using physics to update an important medical device, called the trocar, and improve one of the most dangerous moments in many common surgeries.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service