9. Damon’s Grill & Sports Bar
> Pct. decline in restaurants: 72.3%
> Decline in restaurants: 99
> Total restaurants: 38
> 2012 sales: $70.0 million
> Pct. decline in sales: 75.5%
Damon’s International Inc. filed for Chapter 11 bankruptcy reorganization in October 2009. At the time of the bankruptcy filing, there were about 50 Damon’s Grill & Sports Bars in the U.S., down from 137 in 2002. By 2012, the number of restaurants had declined to just 38 in the U.S. Following some success in the 1990s, Damon’s has begun to struggle, according to Technomic’s Tristano. The company “very likely overextend[ed] itself into markets where it just didn’t have a big enough presence.” He added that the company shifted its menu away from its focus on barbecue. “When they shifted away from barbecue, they lost focus,” Tristano said. “They lost a point of differentiation, and the customer didn’t see them as being different from other brands.” In 2011, the company announced new strategy such as new menus and restructured relationships with franchisees. There are eight more restaurants than there were in 2011, but the Damon’s is still far away from where it was a decade ago.
8. Tony Roma’s
> Pct. decline in restaurants: 71.7%
> Decline in restaurants: 114
> Total restaurants: 45
> 2012 sales: $93.0 million
> Pct. decline in sales: 70.4%
Known mainly for its ribs, Tony Roma’s is another restaurant chain undergoing a massive restructuring. This week in Florida, the company will test a new strategy with new menus, lounge areas, fire pits, other image alterations, and a new name: Tony Roma’s Fire Grill & Lounge. The dramatic changes come in the wake of struggling performance in the U.S. In 2012, U.S. sales were down more than 70% from 2002. Over that time, the number of U.S. locations declined by 114. The restaurant has much more success overseas. According to the The Orlando Sentinal, the chain’s 120 international restaurants are responsible for the majority of the company’s revenues. In the U.S., however, there are now only 45 locations.
> Pct. decline in restaurants: 57.3%
> Decline in restaurants: 238
> Total restaurants: 177
> 2012 sales: $208.3 million
> Pct. decline in sales: 60.3%
Ponderosa and Bonanza steakhouses’ parent company filed for Chapter 11 bankruptcy in 2008. At the time, there were 208 franchised restaurants and 50 company-owned stores. Between 2002 and 2012, the total number of Ponderosa/Bonanza restaurants had fallen from 415 to 177. Technomic’s Tristano explained that the chain’s long-term decline in the U.S. has been largely due to the segment it is in. “What has happened with the brand is that the cafeteria and buffet segment has been on a constant decline because consumers have been looking for quality and not quantity.” Ponderosa may have more success overseas with its grand opening of a new franchise in Amman, Jordan earlier this year. According to the company, the brand is well-known in the region, with restaurants across the Middle East.
6. Black Angus Steakhouse
> Pct. decline in restaurants: 57.8%
> Decline in restaurants: 63
> Total restaurants: 46
> 2012 sales: $135.5 million
> Pct. decline in sales: 54.1%
Los Altos, California-based chain Black Angus Steakhouse has undergone two bankruptcy restructurings over the past decade, the most recent of which occurred in early 2009. ARG Enterprises Inc., the operator of Black Angus Steakhouse, filed for Chapter 11 bankruptcy due in part to its restaurant locations getting hit hard by the mortgage crisis, according to Lisa Poulin, ARG’s chief restructuring officer. U.S. sales over the 10-year period between 2002 and 2012 fell by nearly $160 million. In addition, the number of Black Angus Steakhouses in the U.S. dropped by 57.8%. Technomic’s Tristano noted that the brand has struggled in a very competitive casual dining steak segment. The company has just hired a new CEO, previously of Boudin Bakery and forklift brands. “[T]hey’re trying to change direction and move positive, but they have struggled because their price point is both above value and below quality in the eyes of consumers,” Tristano said.
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