Full-service restaurants in general are also getting a healthy dose of competition from the more hip fast-casual market which includes names like Chipotle (CMG), Panera Bread (PNRA) and newly public Noodles & Co. (NDLS)
So will franchisees get on board with Bennigan's new strategy?
The new design isn't cheap. Remodels could cost around $300,000 while building an entirely new store could be upwards of $800,000.
"In a lot of systems, franchisees welcome rebranding because it drives bottom line numbers. Other times they'll resist it because they don't think the cost will generate enough payback," says franchise lawyer Peter Silverman of Shumaker, Loop & Kendrick in Toledo, Ohio.Silverman represented a handful of Bennigan's franchisees at the time of bankruptcy, who filed a lawsuit against the parent company seeking damages. The suit was ultimately settled. The company says that a handful of existing restaurants have gone through the remodel, with the expectation that all will have switched over in a few years. "Paul is clearly a very passionate smart and energetic leader that seems to be doing a good job of taking investors, prospective and existing franchisees and staff with him as he tries to reinvigorate an iconic brand," IFA's Caldeira says. "I think only time will tell what the results those efforts will bring." -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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