Larry Briski, president of the Franchise Operators Association for Bennigan’s, was taken by surprise Tuesday morning by reports that Bennigan’s parent Metromedia Restaurant Group was shuttering company stores and declaring bankruptcy in order to to liquidate its assets and shut down, citing $550 million in assets and about $150 million in debt.

According to an article in the Post-Tribune, franchisee Briski  learned more on a conference call tuesday afternoon.

Briski said a Tuesday afternoon conference call with company officials affirmed Bennigan’s name and franchise operation would be sold to an Atlanta-based company. The firm, he said, is in the restaurant business and plans to continue the Bennigan’s franchise.

“This will assure us we will have longevity,” Briski said.

He said the new owners will do what it takes to build the brand. He does not anticipate major changes in the franchise operation but does expect to see better marketing and more innovative menu items.

“This is a very good thing for the franchisees,” he said.

…After meeting with corporate officials on several occasions, he said it was his understanding the company would close some underperforming corporate units.

“I was surprised by what they did today. I thought I was more or less in the loop,” he said.

Franchises that remain open still have access to franchise support, such as menu items, purchasing and the supply chain. Briski said his franchises will also welcome corporate coupons.

Briski said he wants to make sure customers understand only the corporate-run Bennigan’s restaurants have closed. “We are open,” he said.

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Post from: EveryJoe

Bennigan’s: Franchise Owners Shocked by Bankruptcy, Closings

S & A Restaurant Corp., parent company of the restaurant chains Steak & Ale and Bennigan’s Grill and Tavern, has filed for bankruptcy.  This morning, Bennigan’s closed all of its company-owned stores.

Bennigan’s Grill and Tavern opened in 1976 and has 800 restaurants in 32 states.  Its independently owned franchises will remain open…and I hope to find one near me.

According to a story in the Wall Street Journal:

National restaurant chains Bennigan’s and Steak & Ale have closed their doors and filed for Chapter 7 bankruptcy protection, shuttering more than 300 locations and letting go of thousands of employees.

It is one of the country’s largest restaurant bankruptcies and eliminates two sit-down chains that have been part of the casual-dining landscape for decades. The chains will liquidate and aren’t likely to re-open.

Late Monday, managers at Bennigan’s and Steak & Ale were told not to open restaurants the next day, according to two people familiar with the matter. Employees were told there wouldn’t be enough money to pay them for the rest of the week, these people said.

Templeton, a spokeswoman for the company, said in an email that the companies that filed bankruptcy cases are popularly known as Steak & Ale, Bennigan’s and Tavern restaurants. She said that not all stores using these trade names have filed bankruptcy, and that stores operated by franchisees aren’t named as debtors in these filings. She said the filing doesn’t include the company’s Ponderosa and Bonanza restaurants, which operate under Metromedia Steakhouses Company L.P.

The pub-themed Bennigan’s had 310 restaurants in 32 states. It was founded in 1976. It is heavily concentrated in states like Texas, Illinois and Michigan. It posted U.S. sales of $542 million in 2007, according to Technomic Inc., a food-industry research and consulting firm.

The restaurant chains are owned and managed by Plano-based Metromedia Restaurant Group, a unit of billionaire John Kluge’s Metromedia empire.

Metromedia also manages Bonanza, Ponderosa and 29 Degrees and Southlake Tavern. The latter two also are closing. 29 Degrees opened in March 2007…

Metromedia has about 750 company and franchised restaurant sites in more than 40 states and outside the U.S., according to its Web site. Its annual U.S. sales are estimated at $1 billion.

Mr. Kluge, a 93-year-old German immigrant with an estimated worth of $9.5 billion, originally bought Bonanza and Ponderosa in the 1980s, later adding the Bennigan’s Grill & Tavern and Steak & Ale chains into one umbrella company. Mr. Kluge is chairman, CEO and president of holding company Metromedia Co.

Metromedia’s steak houses — Ponderosa, Bonanza and Steak & Ale — are concentrated in states including Ohio, Indiana and Pennsylvania. It posted 2007 U.S. sales of $388 million from 370 sites.

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Post from: EveryJoe

Bennigan’s Files For Bankruptcy, Closes Company Locations