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 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


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!

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




Social Wine Club for Craft Wineries


Taco Bell takes on fast casual with U.S. Taco Co.

Taco Bell will test a new fast-casual concept called U.S. Taco Co.  -More

Avocados From Mexico: All New Recipe Brochure
Looking for the sweet spot between indulgence and fresh appeal? Say yes to fresh Avocados from Mexico, all year long. So rich and creamy, use them as a substitute for mayo to create a craveable crab salad sandwich that will make others green with envy. Discover more culinary inspirations and recipes here!

Ronald McDonald gets a makeover for social media debut

Ronald McDonald is giving off less of a clown vibe with a makeover that keeps the color scheme but adds a blazer, a yellow ve -More

Animal fats ramp up flavor

Chicago hot spots are serving up savory dishes flavored with animal fats such as Stephanie Izard's confit goat belly at Girl  -More


Posting a job or finding a job starts here at FohBoh. Call us about special $25 posting packages to syndicate across all major jobs boards.

National News

Dunkin' Brands Reports First Quarter 2014 Results

Dunkin' Donuts U.S. comparable store sales growth of 1.2% - Added 96 net new restaurants worldwide including 69 net new Dunkin' Donuts in the U.S. - Revenue increased 6.2%

Hurricane Grill & Wings Signs Franchise And Multi-Unit Development Agreements For Additional 22 Units

Hurricane Grill & Wings, a restaurant franchise known for its never-frozen jumbo wings and more than 35 signature flavors, announced today the signing of five multi-unit development agreements, representing 22 new locations. The Florida-based brand opened two locations in early 2014, with plans for a total of 14 new units by the end of the year.

Dunkin' Donuts Announces Plans For 20 New Restaurants In South Orange County And The San Fernando Valley

Dunkin' Donuts announced today the signing of multi-unit store development agreements with two new franchise groups to develop 20 new restaurants in South Orange County and the San Fernando Valley area over the next several years.

Brinker International Reports Increases In Third Quarter Fiscal 2014 EPS And Comparable Restaurant Sales

Earnings per diluted share, excluding special items, increased 16.7 percent to $0.84 compared to $0.72 for the third quarter of fiscal 2013

Togo's Inks Deals In Idaho And Utah To Develop 13 New Restaurants

Togo's Eateries, Inc. announced it has signed franchise agreements to develop five restaurants in Eastern Idaho and eight locations in Salt Lake City, Utah. In 2014, the brand will also mark its entry into Colorado, Idaho, and Utah with restaurant openings planned over the next few months.


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: James Patten: The best computer interface? Maybe ... your hands - James Patten (2013)

"The computer is an incredibly powerful means of creative expression," says designer and TED Fellow James Patten. But right now, we interact with computers, mainly, by typing and tapping. In this nifty talk and demo, Patten imagines a more visceral, physical way to bring your thoughts and ideas to life in the digital world, taking the computer interface off the screen and putting it into your hands.

TED: Hamish Jolly: A shark-deterrent wetsuit (and it's not what you think) - Hamish Jolly (2013)

Hamish Jolly, an ocean swimmer in Australia, wanted a wetsuit that would deter a curious shark from mistaking him for a potential source of nourishment. (Which, statistically, is rare, but certainly a fate worth avoiding.) Working with a team of scientists, he and his friends came up with a fresh approach — not a shark cage, not a suit of chain-mail, but a sleek suit that taps our growing understanding of shark vision.

TED: Michel Laberge: How synchronized hammer strikes could generate nuclear fusion - Michel Laberge (2014)

Our energy future depends on nuclear fusion, says Michel Laberge. The plasma physicist runs a small company with a big idea for a new type of nuclear reactor that could produce clean, cheap energy. His secret recipe? High speeds, scorching temperatures and crushing pressure. In this hopeful talk, he explains how nuclear fusion might be just around the corner.

TED: Sarah Lewis: Embrace the near win - Sarah Lewis (2014)

At her first museum job, art historian Sarah Lewis noticed something important about an artist she was studying: Not every artwork was a total masterpiece. She asks us to consider the role of the almost-failure, the near win, in our own lives. In our pursuit of success and mastery, is it actually our near wins that push us forward?

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service