You foodservice romantics may want to give the loved one a special gift this Valentine’s Day: Unlimited burgers, fish fillets, steak and sodas. Yes, buy them a restaurant chain.
Certainly plenty are now on the market, particularly in fast food. This morning, in case you’re just arising, brought confirmation of what has been rumored for a long time: The parent company of Wendy’s is exploring financial alternatives for its secondary brand, Arby’s. That’s financial lingo for finding a buyer or otherwise peddling the portfolio chip. (I’ve often wondered if financial geeks have Exploring Financial Alternatives Events instead of yard sales.)
So, to recap what’s available to you Valentine’s Day shoppers, officially on the block right now are A&W All-American Food, Long John Silver’s, Arby’s, and Charlie Brown’s, the bankrupt steakhouse that has to be sold in the next week or so under a deal with lenders. Red Robin is a judgment call, since investors are demanding that it be sold and say suitors have come forward. But there's been no For Sale sign posted outside headquarters.
Interestingly, the first three on the industry Craig’s List are being peddled because their parents want to focus on stronger brands with more growth potential (A&W and Long John’s are of course owned by Yum! Brands, better known as the franchisors of Taco Bell, KFC and Pizza Hut). So there’s a bit of restaurant triage under way.
If it continues, we may see the restaurant For Sale listing grow to the length of the Singles and Seeking column.
Showing posts with label Nelson Peltz. Show all posts
Showing posts with label Nelson Peltz. Show all posts
Thursday, January 20, 2011
Friday, March 12, 2010
Who should be buying Carl's Jr.
I’m sure the Vegas odds-makers are already taking action on who'll be the next owner of Carl’s Jr. and Hardee’s, the two main brands in the portfolio of CKE Restaurants. Thomas H. Lee is the favorite, with a deal already on the table to buy it for about $928 million, including debt. Then came word yesterday that Nelson Peltz, the bwana who deftly bagged Wendy’s in 2008, was giving CKE’s slightly bald radials a kick.
They may be the most likely buyers. I keep thinking about who might be the most appropriate buyer, from the standpoint of all parties concerned.It makes me wonder if the big casual-dining companies have the Poppers to reconsider their longstanding pledge never to veer out of that market.
It’s almost a reflex with concerns like Darden, Brinker and OSI (the parents of Red Lobster, Chili’s and Outback Steakhouse, respectively). Ask what new businesses might be a worthwhile acquisition or start-up and they’ll invariably conclude with, “…and of course it’d have to be something in casual dining, since that's where we want to stay.”
Meanwhile, they’re having their turnips mashed by quick-service and fast-casual concepts.
They should consider the bold move of buying a quick-service brand and supercharging it with their casual know-how to create the ultimate fast-casual player—a contender genetically engineered to provide cloth-napkin-caliber service and food, with the value, speed and less-processed foods that have established concepts like Panera and Chipotle as the brands of choice among younger consumers. It’d be the veritable Mike Tyson of the sector.
Carl’s would be the perfect subject for the experiment. It’s been trash-talking for years that it offers a burger comparable to what patrons would find in a casual restaurant, for less than two-thirds of the price. To launch the Six Dollar Burger (it actually sells for under $4), the chain even set up a fake restaurant where patrons were charged $6 for the sandwich. Patrons paid without complaint.
Sure, the acquisition would put those casual-dining giants squarely in franchising, a realm where they’ve at most dabbled before, preferring to grow through corporate development and joint ventures. But their current business models aren’t exactly the envy of the business world. Becoming full-fledged franchisors would really open the valve on cash flow.
Meanwhile, the Carl’s and Hardee’s systems would greatly benefit from the training, research and awesome support services provided by the likes of Darden and Brinker.
It’s a deal casual-dining hunter and quick-service should pursue, especially when you consider that CKE might change hands for just over $1 billion. It’s a buyer’s market, to be sure.
They may be the most likely buyers. I keep thinking about who might be the most appropriate buyer, from the standpoint of all parties concerned.It makes me wonder if the big casual-dining companies have the Poppers to reconsider their longstanding pledge never to veer out of that market.
It’s almost a reflex with concerns like Darden, Brinker and OSI (the parents of Red Lobster, Chili’s and Outback Steakhouse, respectively). Ask what new businesses might be a worthwhile acquisition or start-up and they’ll invariably conclude with, “…and of course it’d have to be something in casual dining, since that's where we want to stay.”
Meanwhile, they’re having their turnips mashed by quick-service and fast-casual concepts.
They should consider the bold move of buying a quick-service brand and supercharging it with their casual know-how to create the ultimate fast-casual player—a contender genetically engineered to provide cloth-napkin-caliber service and food, with the value, speed and less-processed foods that have established concepts like Panera and Chipotle as the brands of choice among younger consumers. It’d be the veritable Mike Tyson of the sector.
Carl’s would be the perfect subject for the experiment. It’s been trash-talking for years that it offers a burger comparable to what patrons would find in a casual restaurant, for less than two-thirds of the price. To launch the Six Dollar Burger (it actually sells for under $4), the chain even set up a fake restaurant where patrons were charged $6 for the sandwich. Patrons paid without complaint.
Sure, the acquisition would put those casual-dining giants squarely in franchising, a realm where they’ve at most dabbled before, preferring to grow through corporate development and joint ventures. But their current business models aren’t exactly the envy of the business world. Becoming full-fledged franchisors would really open the valve on cash flow.
Meanwhile, the Carl’s and Hardee’s systems would greatly benefit from the training, research and awesome support services provided by the likes of Darden and Brinker.
It’s a deal casual-dining hunter and quick-service should pursue, especially when you consider that CKE might change hands for just over $1 billion. It’s a buyer’s market, to be sure.
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