Bennigan's franchisees may buy closed corporate locations

The AP reports that Bennigan’s franchisees may buy 40 to 60 closed corporate locations. Bennigan’s franchisees may be able to buy the most profitable corporate locations and ride out the downturn.

The news service also reports that some rival chains, like Texas Roadhouse, are at least partially honoring Bennigan’s gift cards. That may be a smart move to try to gain market share, but it won’t help fight the perception that restaurants in this space are interchangeable. As restaurant industry analyst Darren Tristano told me, casual dining chains failed to differentiate themselves while they expanded much more quickly than the restaurant industry as a whole.

In a franchise system, much of the risk of rapid expansion falls on individual owners, rather than the franchisor. Now the market is flooded with casual dining restaurants, their costs are going up, and people are eating out less. Don’t be surprised to see more casual dining closures ahead.

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