While the world is
reopening after the pandemic, the shakeout within the restaurant sector is just
beginning, to be uncovered. Many legacy
restaurant brands are asking themselves; where do we go from here. All the
while banks are flooded with extra case as consumer savings has skyrocket to all-time highs in large part due to
federal stimulus. Now bankers are making the rounds explain to restaurant
companies why now is the time to either buy a chain or sell a chain.
Heeding that advice foodservice
franchisee and franchisors are buying, selling, legacy brands. According to Steven Johnson, Grocerant Guru® at
Tacoma, WA based Foodservice Solutions® one thing is clear, and that is the bankers are making a lot of money.
Johnson continued, franchisee are
becoming franchisors, and now selling franchisee in a competitive world all
food retailers are seeking a larger share of stomach, a larger share of food
dollars, is anyone really winning?
Consider that Ampex Brands LLC, a
franchisee of 7-Eleven
Inc. and Yum! Brands Inc. that has more than 400 convenience stores and restaurants, acquired
the Au Bon Pain brand from ABP Corp., a subsidiary of Panera Bread.
Now, Au Bon Pain's 171 locations will
join Ampex Brands family, increasing the company's revenue by approximately 10
percent annually. The deal also grants Ampex franchising rights to an
additional 131 sites and expands its footprint internationally. (That’s banker
talk, not a word about the brand or its customer base according to Johnson.)
In a Battle for Share of Stomach
and Share of Food Dollars
Can you Win
Talk about share of stomach / share of
food dollar disequilibrium, post-acquisition, Ampex will assume the role of
franchisor for the first time in its 16-year history. Remember that it has been
a longtime franchisee of 7-Eleven, Pizza Hut, KFC, Taco Bell and Long John Silver's.
Ampex plans to apply its operating
strategy to ramp up Au Bon Pain's
existing cafés starting in the brand's key markets in the Northeast and
Mid-Atlantic. Once existing cafés are reopened and executing with positive
results, Ampex will kick off expansion efforts, starting with corporate-owned
locations, according to the company.
Yes, here is a little more, the parent
company of Taco Cabana has agreed to sell the 148-unit Tex-Mex chain to the
largest franchisee of Jack
in the Box and TGI Friday’s for $85 million. In
case you did not know, the seller, Fiesta Restaurant Group, said it will use
the proceeds from the sale to Yadav Enterprises to pay off $79.2 million in
loans and related fees.
In this case the deal, leaves Fiesta with
a single brand, Pollo Tropical. The transaction will enable “us to create a
more effective, efficient and focused organization, applying appropriate
resources to accelerate delivery of the exciting growth potential we have in
our Pollo Tropical brand,” Richard Stockinger, Fiesta’s CEO, said in a statement.
Yes, you understood that correctly
For Yadav Enterprises, the deal will add
another brand and 142 restaurants to its current holdings of about 400
restaurants. It will also deepen the company’s role as a franchisor; six Taco
Cabana units are franchised.
In addition to operating units of Jack in
the Box and Friday’s, Yadav is also a franchisee of Denny’s, Corner Bakery and
El Pollo Loco. Its restaurants are located across 18 states, with a
concentration in Texas and northern California. Does anyone think that they
were thinking about brand differentiation or how to build a strong point of
differentiation for each brand? No, I
bet most of you thought they simply were looking at you might say dollars not
Many multi-food concept companies appear
to think that each brand is just a widget. In this case in a prepared statement
they said, “We are confident he will be an effective steward of the Taco Cabana
brand for the long-term.”
Does anyone reading this blog post
believe that the buying and selling of C-stores, Chain Restaurants, or Grocery
stores is over? The team at Foodservice
Solutions® believes that widgets churn and brands with differentiation grow.
Don’t over reach. Are
you ready for some fresh ideations? Do your food marketing ideations look more
like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your
retail food brand while creating a platform for consumer convenient
meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the
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