Struggling Chain Restaurants That Are Weirdly Making A Comeback
Is a $1 margarita enough to save a restaurant from going under? The answer is yes, and that's just one of many amazing ways these chains found a way to stay afloat in these ever-changing times.
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00:00Is a $1 margarita enough to save a restaurant from going under? The answer is yes, and that's
00:05just one of many amazing ways these chains found a way to stay afloat in these ever-changing
00:10times.
00:11Golden Corral found itself in a downward spiral before 2020, plagued by unsanitary kitchen
00:16scandals, disgruntled employees, and the struggle to stay relevant in an oversaturated buffet
00:21market. COVID-19 was the final straw. The last place Americans wanted to be was scooping
00:26mashed potatoes out of a communal tray in a crowded restaurant.
00:29We are actually a very clean and safe restaurant, and we have just been working nonstop to try
00:34to meet all of our protocols.
00:36This caused bankruptcies, more than 100 restaurant closures, and 2,300 furloughed employees.
00:42Rather than bow out, Golden Corral saw an opportunity to pull itself out of restaurant
00:46ruin, enhancing its sanitary policies and improving employee relations without increasing
00:51the cost for customers. After the pandemic's damage to the restaurant industry, Golden
00:55Corral had less competition, becoming a beacon for what Americans were craving most after
00:59hardship, familiarity, good times, and the best bang for your buck.
01:03In 2022, the International Food Service Manufacturers Association gave Golden Corral's CEO, Lance
01:09Trenary, the Distinguished Gold Plate Award. By 2023, the chain was experiencing a 17 percent
01:14sales growth, with each location raking in an average of over $100,000 weekly.
01:19Leaning heavily into advertising to younger generations and its multicultural demographic,
01:24the restaurant chain has gone viral on social media and airs commercials on Telemundo in
01:28Spanish. With even more room to grow, Golden Corral is branching out, opening the Fast
01:33Casual Homeward Kitchen restaurant in North Carolina. Trenary told FSR Magazine,
01:37"...we've caught lightning in a bottle at Golden Corral, and I want to make sure we
01:40figure out how to keep the lid on it."
01:42In 2014, things weren't looking so hot for Olive Garden. Younger dining cultures increasingly
01:48craved hipper options and more authenticity, while a damning 294-page report from the Starboard
01:53Value Hedge Fund published all the ways Olive Garden was running its restaurants wrong.
01:57The presentation critiqued the establishment's bloated menu and, even worse, failure to cook
02:02pasta correctly.
02:03Sparking a prompt management shake-up, the report turned out to be the springboard for
02:07Olive Garden's comeback. Under new CEO Gene Lee, the chain went back to the basics, wiping
02:12the menu of non-Italian offerings, adding a higher end wine selection, and expanding
02:16its takeout services — something that no doubt gave the restaurant a head start once
02:20the pandemic hit.
02:21The parent company, Darden Restaurants, enjoyed a 140 percent increase in stocks in the five
02:25years following the revamp efforts, while Olive Garden is still one of the highest-grossing
02:29chains in the U.S., with 2023 sales totaling over $5 billion.
02:33How has business been today?
02:36It's been excellent. We've been full basically the whole day.
02:39Surprisingly, millennials have been driving business and lending the Italian-American
02:43giant a hand in its success. Restaurant university professor Christopher Moeller pointed out
02:47to the Gazette,
02:48"[Millennials haven't stopped buying homes and going to sit-down restaurants. They are
02:51just doing it a little later. Now these younger people are starting families."
02:55And that's always been Olive Garden's core audience. The Tuscan-inspired chain also keeps
02:59its dining rooms full thanks to steady menu prices despite inflation, while staying popular
03:04with promotions like the NeverEnding Pasta Bowl and Lifetime Pasta Pass.
03:09Founded as Smithy's Pancake House in 1957, Perkins Restaurant & Bakery encompassed almost
03:14500 units across 32 states at its height in the late 90s. An ill-fated merger with
03:18Marie Callender's foretold a rocky 21st century for the chain, beginning with the unexpected
03:23closure of several locations in 2011. This resulted in bankruptcy and the loss of 65
03:29restaurants and 2,500 jobs, according to Reuters.
03:32In 2019, parent company Perkins and Marie Callender's, Inc. filed for bankruptcy once
03:37again. Fortunately, they were acquired by Ascent Hospitality Management, the company
03:41that would fuel Perkins' comeback. In an effort to stand out amid inflation and fast-food
03:45breakfast competitors, Ascent has announced a complete makeover for Perkins in 2024, including
03:50a remodel that chain president Tony Ronain described to CBS as vintage-fresh with an
03:55Americana vibe. The overhaul even includes a name change, omitting Restaurant & Bakery
03:59for Perkins American Food Company.
04:01While the iconic bakeries will still be prominent, the chain will offer new menu items like signature
04:05burgers with secret seasonings. Perkins' reimagined restaurants will be about half the size of
04:10the traditional locations, allowing the chain to invest in its new and even smaller, fast-casual
04:15spinoff, Perkins Express, which could move into the small-town and food court markets.
04:19Striving to keep the restaurants relevant, Ronain told CBS,
04:22"...guests are really looking forward to an opportunity to enjoy American classics. They
04:26want a piece of nostalgia. It's a slice of yesterday in a place that feels like today."
04:31It's baked into everything we do. At Perkins."
04:36Everything was eatin' good in the neighborhood when Applebee's opened its 1,000th location
04:40in 1998, having opened its first restaurant barely 20 years earlier.
04:44"'You're feelin' good, cause you're at Applebee's Neighborhood Grilling Bar. They're cookin'
04:49riblets in the kitchen and the chicken's startin' to sizzle."
04:51Kate Taylor, Business Insider's retail correspondent, details that Applebee's success was thanks
04:56to its reliability. They weren't too fancy, they weren't too cheap, but they hit a nice
05:00sweet spot in the middle for people. Shortly after acquisition from parent company Dine
05:04Brands, Applebee's mojo was threatened by the 2008 recession. The chain attempted to
05:08stay afloat with a trendier vibe and upscale offerings, like hand-cut steaks. Unable to
05:13save declining sales, however, the pivot flopped, prompting hundreds of restaurant closures.
05:18New leadership from Dine Brands stepped up in 2017, introducing the chain's iconic Dolorita.
05:23The $1 margarita almost single-handedly caused Applebee's comeback, attracting younger and
05:28older customers, driving food sales, and boosting alcohol to 15 percent of the restaurant's
05:32business by 2019.
05:34Um… oh, that's good."
05:37With almost 1,600 stores across the country, Applebee's has remained one of the most recognizable
05:42brands in the U.S. While it may seem counterintuitive that Dine Brands is currently closing around
05:4630 Applebee's locations, the goal is to cut costs and pump the successful restaurants
05:51with more resources. The parent company is also creating a new prototype by combining
05:55two brands, IHOP and Applebee's, into one location, with a possible smaller building
05:59footprint. Promotions like Applebee's Date Night help keep the chain strong, while a
06:03TikTok of Walker Hayes dancing to and singing Fancy Like Applebee's definitely hasn't hurt,
06:08either.
06:09Being resourceful was nothing new for California Pizza Kitchen, a brand that started at one
06:13leased location in Beverly Hills on pooled funds from savings, bank loans, and friends.
06:18By 1992, less than 10 years after opening, CPK had 26 locations and an almost cult-like
06:24following. 2020 came on the heels of a rough decade for the restaurant, with stiff competition
06:28from fast-casual restaurants and food delivery apps. Because Dine & Sale's accounted for
06:33almost 80 percent of the pizza chain's business, COVID-19 wreaked havoc on CPK, dropping sales
06:38by over 75 percent, shutting down nearly 15 percent of its locations, and resulting in
06:43bankruptcy with a debt of $400 million. According to FSR, California Pizza Kitchen bounced back
06:49from the pandemic quickly, emerging from bankruptcy in November 2020 and increasing its U.S. sales
06:54by over $70 million in 2021.
06:56Apart from an enhanced marketing effort and some menu innovation, the real key to the
07:01restaurant's comeback was expansion. Franchising locations both nationally and abroad and
07:05sliding into non-traditional markets like airports and stadiums, the brand is currently
07:09opening almost 200 locations in 11 countries, with no plans to stop expanding.
07:14Jeff Warren, CEO since 2022, has initiated a multifaceted turnaround strategy that involves
07:19further investment into franchising, but also a renewed effort in appealing to loyal customers
07:24rather than the more costly approach in attracting new clientele. These incentives have included
07:28rewards programs and a thank-you sweepstakes, with winners' prizes ranging from $500 to
07:33$50,000.
07:35It definitely looked like a bad omen when Pizza Hut closed its longest continuously
07:39operating restaurant in 2015. Founded in 1958, the red-roof pizza chain had grown to 11,000
07:46locations in almost 100 countries. But the closure came in the midst of a rough decade
07:50and declining sales, largely due to the struggle for dine-in locations to keep up with delivery
07:55Culminating in bankruptcy and the closure of hundreds of U.S. restaurants in 2020, franchisee
08:00Flynn Restaurant Group acquired 20 percent of the pizza behemoth's locations in 2021
08:05to revive the struggling brand. By 2023, same-store sales in the U.S. had increased by 8 percent,
08:10the biggest leap in 13 years, and system sales had grown roughly 5 percent in 15 years.
08:16No one out-beats the Hut.
08:17Flynn achieved Pizza Hut's slow-burning comeback by slashing underperforming locations and
08:21shifting focus to where the real money is in the world of pizza — delivery. Chris
08:25Turner, CFO for parent company Yum! Brands, stated in an interview that partnering with
08:29third-party delivery services has been a success. He said,
08:32"...if the restaurant is running short of drivers, we can use aggregators as a relief
08:36valve to get delivery capacity."
08:38Pizza Hut is also bringing back favorites like the Big New Yorker Pizza and introducing
08:42new items like the Handheld Melts sandwiches meant to attract solo diners. The brand reaches
08:47its younger crowd by fueling engagement on social media, like this TikTok video of Lil
08:51Jon's Pizza Hut remix.
08:53Friendly's has experienced its fair share of ups and downs, and Against the Odds is
08:57still reinventing itself — quite impressive considering it was founded as an ice cream
09:01shop in 1935 at the height of the Great Depression. Once an empire with 500 locations in the 1970s,
09:07the family-friendly chain fell on hard times in the 21st century, declaring bankruptcy
09:12twice within a decade.
09:13"...I hope they all stay afloat. There's a lot of competition. There's so many restaurants.
09:17It's just tough."
09:19Most recently sold to Amici Partners in 2020, Friendly's is currently down to 103 restaurants,
09:24but CEO Sharif Mityas is determined the chain is in its comeback era. Referencing the pruning
09:28of 23 locations between 2020 and 2023, he told Forbes,
09:32"...some of the restaurant's operations weren't to our brand standard. They were old and tiresome.
09:37Sometimes to grow, you have to shrink."
09:39With a three-tiered revitalization plan in action, Friendly's is remodeling the interiors
09:43of its restaurants, adding new touches to the menu, and returning to its roots with
09:47marketing campaigns centered around the joys of family and ice cream. The chain has even
09:51partnered with the Jonas Brothers, offering Nick, Joe, and Kevin-themed sundaes on the
09:55menu.
09:56Kevin stated in a press release,
09:57"...we've been hooked on Friendly's since we were little. Fun fact, we decided on the
10:00band's name at our local Friendly's back in 2005."
10:03The restaurant chain is also expanding beyond the Northeast and opening locations in Texas,
10:08a rapidly growing, economically booming state that Mityas believes will only spur Friendly's
10:13upward trajectory.
10:15When Evelyn Overton opened a small cheesecake bakery in Detroit, she probably didn't envision
10:19her son borrowing inspiration and later founding The Cheesecake Factory in Southern California.
10:24By 2013, the chain boasted 163 locations in the U.S., expanding internationally into the
10:29Middle East, East Asia, and Mexico.
10:32Its upward trajectory hit some struggles in the 2010s, however, when restaurant-goers
10:35were increasingly demanding healthier options. Men's Health dubbed The Cheesecake Factory
10:39"...America's absolute worst family restaurant," for its excessive portions and calorie counts,
10:45While sales declined in 2017, the chain's desperation hit rock bottom in 2020, when
10:49CEO David Overton publicized a letter to landlords expressing the restaurant's inability to pay
10:54rent due to the COVID crisis. Twenty-seven restaurants closed and stocks plummeted.
10:58Fortunately, The Cheesecake Factory had planted the seeds for its comeback in 2017 when it
11:03turned to tech to attract customers. All of its locations went live online to offer delivery
11:07services, and social media campaigns pushed the image of the chain's fresh, high-quality
11:12ingredients.
11:13While the pandemic no doubt hindered the turnaround, The Cheesecake Factory has remained one of
11:16America's most popular sit-down restaurants, with 340 restaurants globally under all its
11:22brands.
11:23Currently back in a growth phase, Overton explained to Nation's Restaurant News,
11:26"...we're planning to open as many as 22 new restaurants in 2024, including as many as
11:30three to four Cheesecake Factories, six to seven North Italias, six to seven Flower Childs,
11:35and six FRC restaurants."
11:43For more information visit www.overton.com