Well, I guess that’s one way to keep the Nasdaq Stock Price Police off your back. Cosi, the Deerfield, Illinois-based bakery/café chain, today said it is planning a 1-for-4 reverse stock split, effective tomorrow, as the chain’s stock has languished at 70 cents for months has kept it under the threat of a delisting.
The recession’s impact is still working its way through the restaurant industry. Case in point: AppleIllinois, a 33-unit franchisee based in Crestview Hills, Kentucky that suffered steep sales declines during the recession, began losing money to the point it fell behind on payroll and is now up for auction.
The lending markets really have returned. Want some evidence? Just look at some of the terms in the amended credit agreement at LRI Holdings, the owner of the Logan’s Roadhouse steak chain. The amendments gave LRI a pair of covenants that are decidedly borrower friendly.
This might be a good time to do a sale-leaseback. Thanks to a dearth of supply, combined with improving economics, cap rates for restaurants have come down nearly 20 percent—more than a full percentage point—bringing those rates down to levels not seen since before the recession.
Restaurant stocks have had a strong 2013 so far, with a few key exceptions like Irving, Texas-based CEC Entertainment, better known as Chuck E. Cheese. The pizza-and-games chain’s stock has fallen slightly this year, continuing two years of underperformance. That all changed late last week.
Shareholders really wanted some new blood on the Famous Dave’s board. Patrick Walsh, the 37-year-old activist investor who has targeted mid-sized restaurants, was elected to the Minneapolis barbecue chain’s board in a landslide, receiving by far the most votes of any other nominee to the company board.
Paul Mangiamele is leading one of the most unlikely comebacks in the restaurant industry, helping lead the Bennigan’s system back to growth less than five years after the half the chain’s restaurants were padlocked and many of the rest were going out of business. But now he’s looking toward a comeback that’s even less likely: Steak and Ale.
Tim Horton’s has an agitator. According to Reuters, the Boston-based hedge fund Highfields Capital Management has raised its stake in the Canadian coffee and doughnut chain to 4 percent and is pushing the company to use a debt-funded stock buyback to improve returns. But does Tims really need a kickstart like that?
In the first quarter, Buffalo Wild Wings paid a record $2.10 a pound for chicken wings. So far in the second quarter, that price is down to $1.75. By June, the company expects wing prices to fall to $1.50 a pound. And yet the company’s stock is down and it got an analyst downgrade. The reason? Big chickens.
2012 was a trying year for Chick-fil-A, at least since the chain’s president, Dan Cathy, decided to wade into the gay marriage debate by speaking against it, which ignited a boycott by gay marriage supporters and then an anti-boycott by opponents. But none of it slowed the freight train that is the chain’s growth.
It's clear that most franchise restaurants love franchising because of the low capital costs and high profits associated with the business model. Yet many, if not most, believe they have to operate some locations to maintain credibility with their franchisees and test out new concepts. But what is the right percentage of company ownership?
Here’s one sign that the lending market has returned and restaurants are busy building again: the total volume of syndicated leveraged loans in the industry grew 21 percent last year. That’s according to the latest Chain Restaurant Industry Review from GE Capital, Franchise Finance, released today.
Delivery has worked for pizza, Chinese food and subs, so why can’t it work for burgers? Burger King is about to find out. The Miami-based quick-service chain, which has been testing delivery in Miami, Washington D.C., Houston and New York, said today it plans to expand that service into Chicago, San Francisco and Los Angeles.
Diversified Restaurant Holdings is moving up in the world. The Southfield, Michigan-based company this week started trading on the Nasdaq exchange under the symbol “BAGR” after years trading over the counter. BAGR is short for Bagger Dave’s, the company’s 12-unit casual burger concept.
Few restaurants on Wall Street generate polarized opinions quite the way Chipotle does. Everybody admits it’s a good concept. But many think it’s overpriced for a concept whose growth is slowing. The Denver-based burrito concept’s first-quarter financials did little to ease that debate, beating expectations but also showing signs of a slowdown.
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