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The iconic 37-year-old restaurant, once known for its Irish hospitality and Monte Cristo sandwiches, became a tired, outdated brand because of what current CEO and President Paul Mangiamele calls "brand drift," meaning the company got away from what made it successful in the first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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV