Recent Red Lobster 🍽 store closures and a looming chapter 11 bankruptcy has been tough to witness, given their long-dated roots to my home state of #Florida. Bill Darden founded and opened the first Red Lobster #restaurant in 1968 in the city of Lakeland, Florida, and over a 50 year span they went on to become the largest seafood chain in the US, while also expanding globally 🌎 to over 700 locations. It's just wild to me that a concept that big, with so much experience in the game struggled to adapt to current times. But after giving it some thought, I'm not really sure how they could have gone about it with the "Foot" of inflationary pressure being simultaneously placed across the "Necks" of #seafood, #labor, and #location. People might say, well they could have sold more of this or done more of that, but honestly it's like asking Toys-R-Us to stop selling toys and start selling car tires to kids. There was no way that Red Lobster could have completely avoided the macro snowball that was heading their way without principally destroying their concept. In the end - I think the Red Lobster concept simply got caught in the middle of a nasty dual ⚔, one that existed between food sustainability and sticky restaurant category growth (Fast Casual, QSR and High-End). And as the poker players of the world would put it, perhaps it's just a "BAD BEAT" after a really good run! What are your thoughts do you think they could have prevented store closures? #redlobster #sustainability #laborconstraints #foodinflation #seafood #restaurants #hospitality #macroeconomics
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Eighties and nineties nostalgia was dealt a gut punch earlier this month when nearly 100 Red Lobster locations abruptly went dark amid the company’s Chapter 11 bankruptcy filing. Restaurants that took the U.S. by storm 30 to 40 years ago are beginning to drop like flies after a whirlwind past few years that forced rapid innovation in response to evolving consumer demands. At least 12 of the nation’s biggest casual chains plan to scale back their portfolios this year, and while reasons behind the reductions vary, the potential real estate impacts grow more layered as closures bloom. The turnover of space is expected to create opportunities in retail markets where rapid population growth has led to historically low levels of vacancy. But in less desirable markets, the empty carcasses of once-beloved chain restaurants will be harder to reckon with. Around 300 Applebee’s locations have closed since 2017, with up to 35 more planned for this year. TGI Friday’s announced the closure of 36 underperforming restaurants in January, and while rumors of Chilis’ demise have proven untrue, the chain did throw in the towel on 16 struggling branches in 2023.There are 311 casual restaurant locations on the market nationwide.People aren’t looking for legacy brands. They are looking for smaller, independent, newer concepts to create excitement. The good news from a commercial real estate perspective is there is an acute shortage of second-generation restaurant spaces. There will be a number of tenants eager to backfill the spaces. #cre #commercialrealestate #Commercialrealestateadviser #commercialproperty #retailrealestate
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Innovation to drive top line sales. Insightful to many concepts in today’s landscape.
Endless Shrimp Did Not Kill Red Lobster 🦞 (Part 1 of 2) Over the last week, I keep reading that Endless Shrimp killed Red Lobster. Nothing could be further from the truth. Poor leadership compounded by time led to RL’s downfall. I worked at Red Lobster for 23 years. I began in 1999 as an inexperienced server and left in 2022 as a Senior Director of Operations leading over 50 restaurants. Over that time span, I saw the good times and experienced every poor decision that led to RL’s demise. Here’s my opinion about why RL failed. 1. Sale to Golden Gate Capital (Private Equity): when Darden Restaurants sold RL in 2014, this began the string of poor decisions that were unrecoverable. Prior to the purchase, RL owned most of its real estate, allowing for good profit margins. The same day GGC closed on the sale of RL for $2.1B, they sold the owned real estate to several REITs for $1.5B, with exorbitant long term lease-back agreements adding significant cost. Not only did profits suffer, but underperforming and aging locations could not be relocated due to these 25 year agreements. 2. Restaurants should be led by restaurateurs, not finance & marketing departments: During my tenure, the mid 2000’s were the best for the brand. The brand went upscale with beautiful remodels, an excellent fresh fish program, and wood-fired grills. Significant investments were made in employee training and the brands Core Values of Fun, Integrity, Genuine Caring, Hospitality, Team Work, Excellence, and Respect were alive and well. In short, the focus was on quality, and guests noticed. Guests also noticed when RL started taking shortcuts. Smaller portions, lesser quality premade frozen products, bigger server sections all to save a buck dictated by people who’ve never worked as a line cook on a Mother’s Day. The brand became focused on managing the middle of the P&L, and not boldly innovating ways to drive top line sales and staying relavent. (Continue to next post)
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The recent closures of two Red Lobster locations in Kansas City highlight a profound challenge facing the American middle class. These closures, part of a trend affecting 87 Red Lobster locations across 27 states, reveal deeper financial issues. Red Lobster, known for its beloved coconut shrimp and cheddar biscuits, has always been a go-to for middle-class families. Their recent financial struggles, including an $11 million loss due to all-you-can-eat shrimp promotions, underscore the pressures on businesses serving this segment. The middle class's decline is tied to the affordable housing crisis, making it harder for families to cover basic needs and leaving less money for dining out. When a staple like Red Lobster can't survive in America's heartland, it underscores the severity of these financial issues. My marketing mentor, Dan Kennedy, saw this coming. In "No B.S. Marketing to the Affluent," he wrote: “In September, 2014, the TGIF restaurant chain announced it was getting out of the restaurant business! The mid-level, casual dining restaurant business chain linked to middle-class consumers has become a terrible business... This mirrors the severe, widely reported troubles at Darden Restaurants, sparking their bargain-priced sale, i.e., dumping of Red Lobster.” Kennedy’s insights emphasize the challenges of targeting middle-class consumers. This understanding guided our pivot towards family offices in Southeast Asia, where new wealth and a growing middle class offer big opportunities. After spending time in Southeast Asia, I’ve returned to the U.S. to seize unprecedented real estate opportunities. Ken McElroy, a legend in the multifamily industry, recently highlighted this potential: “Over 35 years of real estate investing, never have I seen such opportunity as we're about to see over the next couple of years. The real estate market is short about six million housing units, creating significant pressure on pricing and rent. This temporary disruption will lead to massive price and rent increases, presenting a unique opportunity for real estate investment.” Leveraging insights from experts like Kennedy and McElroy, we're positioning ourselves for success in both dynamic, growing markets abroad and the unique opportunities in the U.S. real estate market.
Two Kansas City area Red Lobster restaurants close as company shuts 87 nationwide
finance.yahoo.com
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Endless Shrimp Did Not Kill Red Lobster 🦞 (Part 1 of 2) Over the last week, I keep reading that Endless Shrimp killed Red Lobster. Nothing could be further from the truth. Poor leadership compounded by time led to RL’s downfall. I worked at Red Lobster for 23 years. I began in 1999 as an inexperienced server and left in 2022 as a Senior Director of Operations leading over 50 restaurants. Over that time span, I saw the good times and experienced every poor decision that led to RL’s demise. Here’s my opinion about why RL failed. 1. Sale to Golden Gate Capital (Private Equity): when Darden Restaurants sold RL in 2014, this began the string of poor decisions that were unrecoverable. Prior to the purchase, RL owned most of its real estate, allowing for good profit margins. The same day GGC closed on the sale of RL for $2.1B, they sold the owned real estate to several REITs for $1.5B, with exorbitant long term lease-back agreements adding significant cost. Not only did profits suffer, but underperforming and aging locations could not be relocated due to these 25 year agreements. 2. Restaurants should be led by restaurateurs, not finance & marketing departments: During my tenure, the mid 2000’s were the best for the brand. The brand went upscale with beautiful remodels, an excellent fresh fish program, and wood-fired grills. Significant investments were made in employee training and the brands Core Values of Fun, Integrity, Genuine Caring, Hospitality, Team Work, Excellence, and Respect were alive and well. In short, the focus was on quality, and guests noticed. Guests also noticed when RL started taking shortcuts. Smaller portions, lesser quality premade frozen products, bigger server sections all to save a buck dictated by people who’ve never worked as a line cook on a Mother’s Day. The brand became focused on managing the middle of the P&L, and not boldly innovating ways to drive top line sales and staying relavent. (Continue to next post)
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The stakes for mid-market & #EnterpriseRestaurants have never been higher. Who should you trust to help Own The Guest Experience"? Get your brand right, and it's worth Billion$...get it wrong and: "One Table Restaurant Brands follows many other restaurant companies that have declared bankruptcy in 2024, most notably, Red Lobster, which filed for Chapter 11 bankruptcy protection in May, Rubio’s, and Tijuana Flats. Other smaller concepts and franchisees that filed for bankruptcy in the first half of 2024 include Party Fowl, Boxer Ramen, Sticky Fingers, Oberweis Dairy, Foxtrot/Dom’s Kitchen, Melt Bar & Grilled, Kuma’s Corner, Subway’s River Sub LLC and Arby’s Miracle Restaurant Group." #owntheexperience #platform #partnership #integration #data #pos #ncr #ncrvoyix #aloha #alohacloud #consumermarketing #services #support #growth #profitability
Tender Greens and parent company One Table Restaurant Brands file for bankruptcy
nrn.com
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🚨 Iconic Red Lobster declares bankruptcy. Blame it on the shrimp 🍤. Apparently, last year’s $20 Endless Shrimp promotion was one of the big straws that finally broke the lobster's back. Meant to increase ⬆️ foot traffic, which it did, the too-generous promotion’s popularity led to $11 million in losses in Q3 of last year. Just another hit to the company’s growing financial woes. 📌 Fast-forward to this year and the company just closed about 100 restaurants, with 48 set to enter auctions to sell furniture and equipment. Now, the company has filed for Chapter 11 bankruptcy protection to improve operations and streamline their business. I hope this iconic restaurant brand can make its way to safer harbors, however their locations are usually saddled with really high rents, given a sale-leaseback situation a few years ago. We will see where the ocean currents take them! Read more here: https://bit.ly/44QHIaB #TSCG #CREtail #RetailStores #CRE #Retail
Red Lobster declares bankruptcy
restaurantdive.com
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NATIONAL - More than 80 Red Lobster locations in at least 27 states were listed as "temporarily closed" on the restaurant's website. Workers at the shuttered restaurants shared their disbelief on social media and said they received no notice whatsoever. A liquidation company announced it is conducting an online auction of Red Lobster kitchen equipment and other contents of the closed restaurant locations. The closures come as bankruptcy rumors circled the seafood restaurant chain in recent weeks. Red Lobster has been searching for a buyer to avoid filing for Chapter 11, multiple media outlets reported last month. The Orlando-based chain, known for its endless shrimp deals, has reportedly been eyeing bankruptcy filing to restructure its debt and downsize from its 650 US locations, CNN reports. The company has yet to publicly acknowledge Monday's closures and did not respond to a request for comment. For years, Red Lobster faced a multitude of difficulties — both financially and internally. In 2021 and 2022, the company saw a new CEO, chief marketing officer, chief financial officer and chief information officer join the C-Suite. All of them left within two years, according to CNN. Last summer, the company revived their endless shrimp menu deal, which led to a $11 million loss for the seafood chain, according to CNN. Red Lobster's top supplier, Thai Union, recently cut ties with the seafood restaurant as well. There are more than 700 Red Lobster locations worldwide. These restaurants in Virginia are part of the national 2024 Red Lobster closures. For more, click on the link below. #escrowcredirt @newmarktitleservices https://lnkd.in/etqS4ecg
Red Lobster locations abruptly closed in Virginia
13newsnow.com
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Food & Beverage Specialist, #Leader Siena/SCCC Grad - Management, Marketing & Business Administration. Web Designer, Social Media Marketer, Journalist, Photographer, Travel Blogger, Copywriter, AI
“How to lose all of your market share, franchisees and profits in one years time” Pizza Hut 101 The writings on the wall for any and all national restaurant chains… Pizza Hut has alienated themselves so bad from the public image that their franchisees won’t even pay them to remain a franchise. Anywhere from 50-179 Restaurants closed overnight. Franchisees allege that Pizza Hut has not stayed relevant, nor competitive with Dominos, Little Caesar’s & Papa Johns, and have not made progress in upgrading technology and delivery apps. The franchisees would rather start fresh with 179 new restaurants than remain as “Pizza Hut” https://lnkd.in/eHYE-jAF
Pizza Hut has abruptly closed 15 restaurants - with 129 more at risk
dailymail.co.uk
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Alicia Kelso Nation's Restaurant News tells us - "Nearly 33% of the Top 500 chains experienced a net decrease in 2023 and those closures have continued in 2024" Sales from the Top 500 restaurant chains grew by 7.8% in 2023, according to recently released Technomic, Inc. data. Further, the domestic footprint of the Top 500 chains increased by 1.8% in 2023 to a total of more than 233,000 restaurants. This marked the highest rate of new location growth since 2016. That doesn’t mean it was all rainbows and butterflies for the industry, however. Much of the unit growth was paced by a handful of players, like Jersey Mike's Subs, 7 Brew Coffee, and Crumbl, while much of the sales were driven by higher prices. And, as the overall count of Top 500 locations grew, nearly 33% of ranked chains experienced a net decrease in locations in 2023 — an uptick in chain closure rates versus both 2022 and 2021. All told, there were 17 chains that experienced a double-digit unit count retrenchment from 2022 to 2023, including: Church's Texas Chicken’s closed 13% of its system last year, going from 925 in 2022 to 805. California Pizza Kitchen is also 13% smaller, ending 2023 with 140 locations. TGI Fridays is over 20% smaller, and now counts about 230 restaurants. O'Charley's closed nearly 55% of its system in 2023 and now has just 64 locations. Corner Bakery is nearly 25% smaller, finishing 2023 with just over 100 locations after filing for bankruptcy in February last year. Boston Market retrenched by nearly 68% in 2023, going from nearly 350 restaurants in 2022 to just 91. UNO Restaurants, LLC is over 10% small...Clickthru to get the rest... https://lnkd.in/e-ERcvzt #QSR #Entrepreneur #Restaurants #Franchise #Franchising #FranchiseChat Chainformation Altir Industries, Inc. Ned Lyerly Joe Caruso Michael (Mike) Webster PhD Anders Hall Jonathan Martin Michael Scherr Delaney Hetzer Dr. John P. Hayes, CFE Au Bon Pain Joe's Crab Shack Grand Lux Cafe Quiznos Fuddruckers Romano's Macaroni Grill Red Lobster Tijuana Flats Tex-Mex Rubio's Restaurants, Inc. Captain D's Potbelly Sandwich Works Swig Hawaiian Bros Island Grill CAVA Dutch Bros Coffee Gen Korean BBQ House Salad and Go Smalls Sliders Savvy Sliders Mo' Bettahs Kura Sushi USA
What the latest closures mean for the restaurant industry
nrn.com
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Our client, TXB, was highlighted by the Wall Street Journal this past weekend in an article that discussed food being an appetizing opportunity for convenience stores. Industry wide, food-service sales account for about a quarter of in-store sales for convenience stores but well over a third of in-store gross profits (both figures are industry averages). The food strategy for most convenience store chains is hands-off; prepared foods are brought in and heated up in the store. Chains that prepare and sell freshly made food – like TXB and Casey’s – have the potential for better loyalty and margins. This strategy of having an on-site kitchen can be complicated and requires additional investment. 1912 Ventures knows firsthand, as we have represented multiple restaurant chains with their commercial real estate, including two dedicated commercial kitchen projects (with no retail service) over the past 18 months. A shift to electric vehicles should increase the food business for convenience stores if it means customers spend more time charging their vehicles. TXB has deliberately placed EV charging stations near their outdoor dining facilities. My favorite quote in the article came from Darren Rebelez (Casey’s CEO), who said: “You might fill up a tank once a week, but you eat three times a day.” As an aside, 1912 Ventures originally helped Bucky’s Convenience Stores expand into Texas and open five locations prior to the entire chain being sold as a portfolio to Casey’s. That sale included 94 retail stores, 79 dealer locations, and several real estate parcels for building new stores in the future. https://lnkd.in/gY9ehKwC #commercialrealestate #cre #retailrealestate #retailtechnology #realestatedevelopment #fuel #restaurants #foodservice
Convenience Stores Would Rather Sell You Pizza Instead of Gas
wsj.com
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