June 5, 2008
Bottom of the food chain
One day you are on top and the next day you're on the bottom of the food chain.
Just ask Clay Dover of Bennigan's and Pondersa restaurants. Just this year, the President and CEO of Metromedia Restaurants, accepted the Cheers Magazine Award for Beverage Excellence and the title of Best Chain Spirits Program for Bennigan's.
Last week he resigned.
This week the company faces bankruptcy.
The Wall Street Journal is reporting Metromedia, the owner of national casual-dining chains Bennigan's, Ponderosa and Steak and Ale, is in talks with its major lender GE Capital Solutions in an effort to stave off a possible bankruptcy filing.
Why? A failed business model? A failing economy? A failed nutritional menu at all of these restaurants?
Is all of the above the correct answer?
The WSJ reports life has become difficult for casual-dining chains as consumers cut back on discretionary spending. And at the same time food prices for everything from corn to steak are on the rise. (Too many years of prices held down by government subsidies.)
Other chains struggling with unhealthy P&Ls are Outback Steakhouse and Rudy Tuesday.