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The restaurant industry is known for entrants and exits. Last year saw Potbelly's' (PBPB) IPO, and recently both Papa Murphy's and Zoe's Kitchen have filed to go public. It's a difficult business, and the recent high-profile Sbarro and Quiznos bankruptcies suggest that it is becoming even more so.
Combined the pizza chain and the toasted sandwich company have thousands of locations across the U.S. Despite that size, however, this is not the first time that Sbarro has gone through bankruptcy. In 2011 the company went through a Chapter 11 reorganization. And Sbarro was not the only pizza chain to file bankruptcy in 2011 -- according to Pizza Today, it was the third large pizza chain to declare bankruptcy in less than a year alongside Round Table Pizza and Uno Chicago Grill.
What's plaguing these companies today?
According to Bob Goldin, executive vice president at Chicago-based restaurant researcher Technomic, "it's a survival of the fittest" because the quick-service food industry is not growing.
Third-party research firm NPD found that that total restaurant traffic was flat overall for most of 2013, with the only bright spot being breakfast. NPD's findings revealed that U.S. consumers made more than 12.5 billion visits at breakfast time for the 12 months ended December 2013, marking the third consecutive year of increased breakfast traffic. By comparison, traffic for lunch and dinner fell 1% last year. Lunch and dinner traffic, however, still represent a far greater proportion of overall restaurant traffic -- at least for now. Per NPD, morning meals account for 21% of all visits, while lunch and dinner account for 34% and 31%, respectively.