Bennigan’s Bankruptcy Indicative of Larger Casual Dining Woes, Says Technomic

 

‘These restaurants share many subtle and complex challenges that extend beyond this difficult economic climate,’ says Ron Paul, president of Technomic. ‘To some extent, they’ve become victims of their own success-a mature category with too many units and not enough differentiation, at least in the eyes of consumers.’

According to Technomic, the top 20 casual dining chains in the category in which Bennigan’s operated had unit growth of 45 percent during the most recent five-year period, well beyond the growth in demand.

Bennigan’s Bankruptcy Indicative of Larger Casual Dining Woes, Says Technomic

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One Response to “Bennigan’s Bankruptcy Indicative of Larger Casual Dining Woes, Says Technomic”

  • guest:

    A new article on MSN this morning talked about what happened to Franchisees when a Franchisor files for Bankrupcy-Bennigans & Ground Round were their examples.
    It more or less said that Franchisees could expect high prices due to the economy of scale. Which makes sense since Corporate buying power is what keeps prices artifically low for franchisees-that coupled with scale of production. The more of something you make the cheaper it becomes.
    The article said that Ground Round owners finally organized into a co-op but went from 72 stores to around 40. They actually bought the company from the original franchisor.
    Franchisees said that the first thing they had to do was get the word out that they were still opened.
    I also saw a report on the news that said interestingly enough that the middle of the road casual dining places were having the biggest loses, consumers were having a hard time differentiating one from the other, High end eateries were doing well, and low end eateries are doing well, but the middle of the road ones are seeing the biggest decline in business.
    Of course then there are the Food Nazi’s in California who want to drive all fast food places into the Pacific ocean. Ya gotta love Berkeley!

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