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Industry Currents

Discussing recent news events in foodservice

410 Discussions and 2,848 Posts
Steve A Joined
Feb / 2005

Ryans/Old Country Buffet File Bankruptcy

Buffet Holdings Inc, parent company for Ryans and Old Country Buffet, file bankruptcy. It's odd in our area for a chain, much less a "trough" to close down. Bulk-for-buck tends to be what stays alive.

You want to open a mostly successful restaurant in the south? You need to fill three requirements:

  • Be a chain,
  • Sell fried food,
  • Have all you can eat.

How Buffet Holdings Inc didn't get that memo is beyond me.

Ciao,

DHSJoined
Feb / 2008
DHS

While the "too much debt, tight credit market, lack of cash flow" explanation is pretty much on target, I think OCB started getting off the track years ago. In the early 90's, this was a company that made much out of the quality of their individual store and multi-unit superviision. District Managers had 5 to 10 stores. General Managers were very well paid by industry standards, and had 2 or 3 subordinate managers in each stores. Various changes among the "corporate suits" resulted in a, "we don't really need expensive managers" philosophy. "Anyone can run an OCB," they decided. "We have recipies." "We have procedures, and policy manuals." If you can read, and give up your family several weeks a year to come back to our corporate palace for ongoing indoctrination - er, training, then you to can be an OCB General Manager. They found ways to signifigantly reduce manager wages and staffing, and embarked on a program that eventually left District Managers with 15 to 20 stores to supervise. All the while taking on lots of debt to buy out or merge with competitors whose different company cultures and concepts were more expensive and difficult to accomodate than they anticipated.

The Cat ManJoined
Jan / 2007
The Cat Man

Good post DHS.... I think you're right on track. There are several other chains that are going or have gone down the same path. That is exactly what happened with Steak n Ale, Bennigans, Houstons, HOPS and Lonestar to name a few. It's a classic mistake that repeats itself all too frequently. Of course, this also happens all too often with independents, but we rarely hear about that.

DOUGWELK@YAHOO.COMJoined
Feb / 2008
DOUGWELK@YAHOO.COM

the problem with buffets houses is volume factored against margins. if a company needs each unit to do 70 or 80k a week to make money, from what point does break even end and profit begin? if a unit drops to 50k a week is it loosing money?

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