It’s called “Private Equity” where people with money buy up restaurant brands and chains, then simplify and cheapen the menu to make more money from people who are loyal customers. They can ride the inertia for 3 or 4 years then liquidate the company in bankruptcy and come out ahead on the investment. It’s a crappy system but it works for the people who have the money when the restaurant chain runs out.
For me, this is a tough question. I have always like Capitalism. A Market Economy. Economic Freedom. But I look around at the world today and I see a whole lot of people (just about every business and institution) and it's all about SQUEEZING every possible cent out of everyone. Screw the public. Screw the employees. The only thing that ever matters is "making the numbers" for the current financial quarter so that the Big People can get their bonuses and the stockholders can make some money.
I get it. That's good. That's Economic Freedom.
But now the world just sucks for almost everyone.
NOT TOO FAR FROM THE METHOD OF BUYING UP BANKRUPT COMPANIES & SELLING OFF ALL THE ASSETS—DOWN TO THE TOILET PAPER:
MITT ROMNEY
In this case their changes started with covid and the major culling of herds due to diseases and drought across several,successive years. Many other restaurants did the same. Their supply chains couldnt get what they used to, and many customers were gone awhile, so they switched to less expensive supplies and ingredients. Once covid was over, people,started coming back but then disliked how the food quality changed, and didn’t come back, so restaurants, even if they wanted to switch back to their former better normal suppliers, didn’t have money coming in from customers to do so, so they were stuck with the lesser foodstuffs and no expected large back-to-normal increase in customers.
Now this is bad enough, but then take a company experiencing this, and then have them voluntarily Bud Light themselves, and you’ve got a place that can easily take itself out of business.
Bamboo Lounge
Well, private equity is undergoing a shift, and that's a good thing and something many in the industry deserve. Hell, I first wrote about where private equity's focus should be when I did my dissertation back in 2009.
None of the PE firms wanted to listen back then, or even since. Now they are being forced to as the number of Zombie firms, and portfolio companies are starting to line up. There are something like 31,000 firms that have exceeded what would be a normal "hold" period, and that is costing the primary investors (Limited Partners) money.
It's likely to be a shake-up for many firms, with some no longer able to raise a new fund; which is a good thing.
Pizza Hut used to make ok pizzas.. not the best but ok, until it was destroyed by private equity.
Cracker Barrel is a public company that is traded on NASDAQ, not owned by private equity.
The shareholders should be demanding accountability from the idiot CEO.
But how do they make money then? Liquidating spent assets won’t bring in a lot. And the initial investment is a lot.
wtf? Cracker Barrel is a publicly-traded company.
Cracker Barrel [CBRL] IPO'd in 1981 and trades on the NASDAQ.
CBRL is an S&P 600 mainstay, mostly owned by American-based equity market companies. If you have a non-self-directed 401k, you own CBRL.
Masino is not alone in governance, the 10-member BoD, carefully diassembled over the past 5 years post-pandemic, has exactly 2 straight white dudes who are the only 2 who have ever eaten at a CB with their families).
The other 8 directors are a combination of women who hate white men, and 'look their picture up in the dictionary next-to-DEI' textbook DEI appointments.
Taking black eyed peas off the menu isn’t cheapening the menu. There are few things that are cheaper than Black Eyed Peas.
Quite frankly, this is nothing more than bloggers having nothing worthwhile to post about.
That is exactly what was done to Red Lobster.