This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bennigan's Turnaround Hinges on Franchise Success

NEW YORK (TheStreet) - Five years after the company went bankrupt, Bennigan's is reinveinting itself and using franchising as its avenue for a successful brand reintroduction.

The iconic 37-year-old restaurant, once known for its Irish hospitality and Monte Cristo sandwiches, became a tired, outdated brand because of what current CEO and President Paul Mangiamele calls "brand drift," meaning the company got away from what made it successful in the first place to chase growth. Instead Bennigan's parent company ended up filing for Chapter 7 bankruptcy protection in July of 2008, shuttered all 150 company-owned restaurants seemingly overnight and left a handful of franchisees to fend for themselves.

Fortress Investment Group (FIG) bought the brand from creditors the following month. Bennigan's Franchising Corp. was created. Mangiamele was hired in 2011 to head up the brand reintroduction.

Now the brand is staging a comeback with Mangiamele, a 30-year franchise veteran, at the helm. But with fewer than 100 restaurants, the Dallas-based company has an uphill battle to climb if it wants to regain the trust of customers and existing franchisees all while succeeding in today's ultra-competitive U.S. restaurant segment.

"I'm not quite sure the brand can bounce back," says Tom Kelley, president of AccessPoint Group, a restaurant consulting firm.

"The fact is when you have a brand that dies and lets locations die and lets your franchisees at the time go out of business without letting employees know ... it drives a big wedge in the community," Kelley says. "It's really hard to build public acceptance or public accountability."

On top of that, the demographic that once ate at Bennigan's has aged, leaving the restaurant no choice but to attract new customers, Kelley says.

Bennigan's is looking to appeal to multi-unit franchisees that are already in the food business, where the concept would complement their portfolios and have the opportunity to scale their operations across several brands.

"The plan is to grow, but not grow for growth's sake," Mangiamele says.

"I want to go to markets that were already penetrated from a corporate standpoint before bankruptcy, where I already know the markets did well and the brand was very well received," Mangiamele says. "We're looking in the Southeast, penetrating more in Houston, Austin, Denver and other cities within Colorado because the brand did phenomenally well." The company is also looking to expand internationally as well.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs